Xiaomi reported on Tuesday better-than-expected revenue of RMB 72.2 billion (around $11 billion) for the third quarter, the fastest growth the Chinese smartphone maker has seen since its 2018 listing.

Why it matters:ย The strong performance shows how the Beijing-based company has benefited following US sanctions imposed on its archrival Huawei. Xiaomi’s global smartphone shipments grew 45% year on year to 47.1 million units in the third quarter while Huawei’s fell 23% year on year to 51.7 million units, according to market research firmย Canalys.

  • However, Xiaomi President Wang Xiang warned of a โ€œsupply chain shortageโ€ in the fourth quarter during an earnings call late Tuesday. Wang did not provide further details but said the difficulty could last until next year.
  • Unlike Huawei, which has been essentially cut off from the global semiconductor supply chain because of US sanctions, Xiaomi is free of geopolitical tensions.ย 

Details:ย Revenue for the worldโ€™s third-biggest smartphone vendor in the September quarter grew 34.5% year on year, said the company in aย filingย with the Hong Kong exchange Tuesday.

  • More than half of Xiaomiโ€™s third-quarter revenue came from overseas markets, which grew 52.1% year on year to RMB 39.8 billion, the company said. Its smartphone shipments in Europe grew 90.7% year on year in the same period, seizing an 18.7% market share, said the company, citing Canalys data.
  • Xiaomiโ€™s adjusted net income for the quarter grew 18.9% year on year to RMB 4.1 billion, according to the unaudited results. Shares of the company more than doubled this year.

Context:ย Xiaomi beat Apple to rank the world’s third-largest smartphone vendor in the third quarter behind South Koreaโ€™s Samsung and Huawei, according to Canalys.

  • The company is also expected to benefit from theย saleย of Honor, Huaweiโ€™s budget phone brand, just last week. Analysts suggested that the company couldย gainย around 15 million units in additional smartphone shipments because of Honorโ€™s exit.
  • Xiaomiโ€™s Wang said during the Tuesday earnings call that the company has no plans to change its market strategy because of the Honor sale. โ€œWe were also informed by the media that Huawei sold Honor. Anyway, our strategy is unchanged and I donโ€™t see the necessity to change it,โ€ he said.

Writing about semiconductors and telecommunications.