Xiaomi from China Doubled Sales to $12 billion in 2014
You could be forgiven for not having heard of Xiaomi before. They make smart phones. A lot of them. 61 million phones in 2014 alone. According to IDC data they held the number 3 spot globally for units sold though with the acquisition of Motorola Mobility by Lenovo; the latter has slid into the 3rd spot and Xiaomi has fallen to fourth. The reason you probably haven't heard of Xiaomi is because they mostly sell in their native China.
The company manufactures and sells phones at close to cost. In 2014 they generated approximately $12 in revenues (74.3 billion Chinese yuan) but only $56 million in net profits. These are like bulk retailer Wal*Mart profit margins rather than far more juicy Apple or Microsoft profit margins.
The sales through 2014 rose 135 percent over the prior year. The market share largely came out of Samsung's share of the smart phone market which reduced by 5 percent over the same period causing profit warnings at the Korean company.
Private investors are bullish on the prospects of Xiaomi supporting a $1.1 billion round of fresh capital funding which placed a rich valuation of $45 billion on a company that fell way short of producing $100 million of profits in 2014. The valuation by investors back in August 2013 was already $10 billion. Someone somewhere with very deep pockets must believe that they're going to become far more profitable in the future and / or grow their market share much faster still to invest this much in a company producing so little actual profit.
International expansion is being worked on at Xiaomi but the American market is not on their radar at the present time. Asia, India, Brazil and Mexico are key new markets for the company and then expanding from there. Certainly the likes of HTC, LG, Lenovo and Samsung had better watch out otherwise they'll see their market share erode still further.
