Xiaomi ends slump as smartphone shipments jump 70% in Q2, thanks to ‘iron-fist’ of quality

Xiaomi Mi 5c smartphone which is powered by the company's first Surge S1 chipset.

After a rough 2016 during which Xiaomi stopped disclosing data about smartphone shipments, the company today revealed numbers from its smartphone shipments in the second quarter.

Spoiler alert: They rocked the Casbah.

At least they did according to a letter Xiaomi founder and CEO Lei Jun sent to employees that was helpfully blasted out to reporters around the globe. Jun said the company shipped 23.16 million smartphones in Q2 2017, which is up 70 percent from Q1 and sets a new record for the company.

“This achievement signifies a major inflection point in our growth — after two years of internal recalibration, Xiaomi is once again embarking on a rapid growth trajectory,” Jun wrote. “This is a truly significant milestone for Xiaomi — to date, no other smartphone company globally had been able to resume growth after a decline in sales.”

Jun chalked the rebound up to big investments in design and R&D. He also said the company had recommitted itself to quality control and customer satisfaction.

“After much internal discussions, we laid out the blueprint of our action plan and established a division solely focused on product quality,” he wrote. “Our goal is to win through the ‘iron-fist’ of quality!”

The apparent turnaround also comes after the departure of Hugo Barra, the Google exec that Xiaomi poached in 2013 to build its brand internationally. Barra said he was leaving for personal and health reasons, though his departure also came after a miserable year for Xiaomi.

Indeed, just a few months ago, analysts were saying the company would have a tough time just getting stabilized. Huawei had taken the lead again in the Chinese market, along with newcomers Oppo and Vivo.

“To grow this year, Xiaomi will need to quickly switch from being a value-for-money vendor to become an aspirational brand,” said Canalys Research Analyst Mo Jia in an April research note. “Xiaomi’s desire to move up the value chain in China will be an uphill struggle, considering Oppo and Vivo’s lead and Huawei’s plans to increase investment in its offline channel in 2017.”

Indeed, Jun said much of the company’s success was the result of changes in Xiaomi’s retail sales model. But it also made big inroads into India, where he said sales increased year-over-year by 328 percent in the first six months.

Jun said the company now has a goal of shipping 100 million smartphones in 2017. By way of comparison, Apple sold 211.88 million iPhones in fiscal year 2016. Some analysts are projecting that number will jump to 250 million or higher for fiscal year 2018 with the release of the iPhone 8.

Still, Xiaomi and Jun are feeling the wind at their backs.

“A new chapter for Xiaomi has just begun, and so many possibilities lie ahead of us,” he wrote. “Our future is as vast as the constellations and beyond.”

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