Xiaomi became a $100 billion phone brand without wooing the West
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i dont know about mi a1, but jerryrigeverything in youtube can answer your durability concerns
Damn. Looks like I’m really getting Mi a1.
Xiaomi does way more than just produce Android phones though, they have a foothold in a lot of different products. They are including that in their valuation too.
Quick question here, how durable their products are? Specifically the Mi A1? I’m planning to upgrade my Zenfone 2 Laser 5.5. Been using it since Jan 2016 and this phone suffered countless drops and only got some scratches at the back but everything is still working fine.
> Hard working single mom from the ghetto is richer than an average family over here.
Not to mention they get all the latest and gratest iPhones every year. How?
They even open source their device after a year so people can install custom ROMs in them.
that is a positive note for their IPO if true.
The fanboys here don’t want to hear these sorts of rational things (though apparently their 2017 revenue was in the $18 billion range).
So Xiaomi made $1 billion in net profit in 2017, according to outside projections which Xiaomi won’t confirm (though they have repeatedly said they don’t profit on device sales). Meanwhile, Samsung made $12.8 billion profit in Q3 2017 alone.
https://www.theverge.com/2017/10/12/16467628/samsung-q3-2017-record-earnings-guidance
So basically, Samsung made about 50 times the profit of Xiaomi if you project that over an entire year. Yet Samsung has a market cap of $350 billion and you think Xiaomi should be valued at $100 billion despite Samsung being dozens of times more profitable.
Well, Xiaomi [seems pretty profitable](https://www.reuters.com/article/us-xiaomi-profits-exclusive/exclusive-ipo-hopeful-xiaomi-set-to-blow-past-2017-revenue-target-sources-idUSKBN1EF30M).
Food, and pretty much everything else is much cheaper in Serbia than in the USA. Yes, gas, technology, international food and clothing brands are exceptions. But most regular food like bread, rice, eggs, potatoes, apples are in the USA multiple times more expensive.
You say that a working couple has 600€ ($735) in Serbia. Your “ghetto single mum” 40h minimum wage worker gets just over $1,150 per month after taxes.
Numbeo (Comparing LA to Belgrade) or the [Globalpovertyguide](http://www.globalpropertyguide.com/Europe/Serbia/currency-value)
> 1 bundle of goods and services costing US$1 in the US would cost US$0.38 in Serbia
both suggest that you need to earn 2-3 times more in the USA to have the same living standard that you have in Serbia.
Therefore I still doubt your statement that a single minimum wage mum would be richer than a family with two average payed workers in Serbia.
Now, keep in mind: My initial comment was just a guess and I have no clue how to make the comparisons correctly, but what you describe about your life would just as well fit to the single mum that only earns a minimum wage in the US. She can’t do the “US citizen things” that you describe.
This valuation makes little sense. It is a product company without proprietary IP building off Android. The value moat is super thin and barrier to entry super low.
Backing out the $100B valuation implies a revenue range between $25B – $35B assuming a 3x – 4x multiple. The last public report of their revenue was $12B in 2015.
Unless Samsung, LG, Huawei, HTC etc all missed something, I find it hard to believe one single OEM bagged $10B – $20B of new revenue in the Android smartphone market while the rest post single digit growth.
Assume a more likely scenario of $15B in 2017, to justify a 7x revenue multiple Xiaomi would need to have more recurring revenue and predominantly software driven like Google. And if that were true I’m sure the management team would of had a press release to signal / market the change in direction especially if they are hiring banks to do an IPO road show.
But to be fair, in Singapore other phones are also more expensive.
You really can’t compare it like that. Almost all of your costs are cheaper, too.
At the end, both maybe have nothing leftover at the end of the month, so saying someone is richer, just because they earn more in their country isn’t automatically true.
The same way that people see a map to big profits with Amazon and other companies whose market valuations are disproportionate to their earnings. Because that’s what market capitalizations represent: profits (be they current or anticipated).
For Xiaomi I see a company that has decent market share (but no profit on their hardware sales), competing in the same space as multiple other device manufacturers. I also see what is by far the most profitable Android manufacturer (Samsung) having low profit margins, which seems to set a pretty low ceiling for companies like Xiaomi. And despite Samsung being more profitable in the Android sphere and having a much more diversified product line-up, Samsung’s market capitalization is only $350 billion.
its the same here in singapore. buying export is 30-40% cheaper.
Well – they offer exciting and often unique products for a reasonable price.
Xiaomi offers one of the best bang for buck out there.
imo, the brand is giving customers high specs phone without any special features, decent quality with a reasonable price, and im a fan of that.
Yup. That’s why these social media companies have had huge IPOs despite operating at a loss. It’s “soft assets.” If you own an object that’s in the pockets of 100M people, that’s a lot of outreach. Plus, their presence in India is what’s driving this. They sell phones for cheaper than practically every one else, in the world’s second most populated country that is a developing nation whose economy is only getting better. A strong presence in China and India means a strong presence in almost half the world’s population. Their expansion in to Europe is going great as well as they open brick-and-motar stores in both regions.
$100B is a bit much without the stability of a strong western market for them, but with Huawei’s failure to get in to carriers this year in the Us, that leaves Xiaomi in a good position to run up their worth
Amazon’s valuation is based on it having a roadmap to big profit. As I said in my initial comment, Xiaomi doesn’t have one.
Not completely true.. valuation isn’t purely based on profit, but sales, growth and assets as well. Amazon makes next to 0 profit but it’s all about their IP’s they own. Also, their phones are sold as a loss leader, everything else they sell isn’t that cheap.
$100 billion valuation implies big profit, and Xiaomi doesn’t make big profit and doesn’t seem to have a roadmap to big profit. There’s a reason many think this valuation is crazy, and I’d wager the valuation at any IPO is much, much lower.
Fairly simple, they sell decent products for a fair price, instead of relying on image, or rather their image is that of a decent company.
If they can expand into other countries, and have a returns and repair centre in that country, they’ll get the people who are wary of buying from China.