Headline understatement of the year: Xiaomi Makes a Profit on Its Cheap Smartphones
Chinese smartphone maker Xiaomi Inc., which was founded just four years ago, already is among the world’s largest smartphone makers.
Now a confidential document viewed by The Wall Street Journal shows that Xiaomi’s net profit nearly doubled last year, making it a lucrative business in an industry where most players selling cheap handsets struggle to break even.
Xiaomi, which a few months ago surpassed Samsung Electronics Co. as the biggest smartphone vendor in China by shipments, presented the document to banks in its recent pitch to raise $1 billion in loans for overseas expansion or acquisition.
A table in the document showed that Xiaomi’s net profit last year rose 84% to 3.46 billion yuan ($566 million) from 1.88 billion yuan in 2012. Its revenue more than doubled to 27 billion yuan. Another table included a forecast of a 75% net profit increase this year.