Xiaomi Says Shrinking Smartphone Sales Won’t Hit the Company

Xiaomi Says Shrinking Smartphone Sales Won't Hit the Company

Sharp drops in smartphone sales for China’s Xiaomi Inc will not have a major impact on the company as profit growth will be driven by sales from smart home devices as well as revenue from its software eco-system, a senior executive said.

Xiaomi was valued at $46 billion (roughly Rs. 3,14,938 crores) in its last fund-raising in 2014 – making it briefly the world’s most valuable start-up at a time when it was China’s best-selling smartphone maker and looked set to make a splash worldwide.

But last year it missed its global smartphone targets by 12 percent, while its third-quarter China smartphone sales have tumbled 45 percent, according to research firm IDC – raising doubts that the valuation is still warranted.

Xiaomi’s global vice-president Hugo Barra said the company’s business model was not based on money made from handset sales per se and that it did not need to raise more funds or see any point in doing so at a valuation of less than $46 billion.

“Basically we’re giving [handsets] to you without making any money… we care about the recurring revenue streams over many years,” he told Reuters in an interview.”We could sell 10 billion smartphones and we wouldn’t make a single dime in profits,” he added.

Xiaomi, which discloses little of its profit and revenue figures, has increasingly emphasised its range of home appliances such as air and water purifiers, and rice cookers as key earnings drivers.

In April, Xiaomi Vice President Liu De said the firm expects sales of smart home devices to double to 10 billion yuan ($1.5 billion) this year.

The company has invested heavily in India and Southeast Asia and is making its first forays into the US market – launching next month its first device capable of roaming on the country’s 4G networks.

Barra said they are first targeting Chinese users travelling in the US, but are laying the groundwork for direct sales to US consumers.

In January, Xiaomi will also make its debut at the Consumer Electronics Show in Las Vegas, launching a new product during the event, he said.

Xiaomi’s tentative first steps in the US smartphone market come as cash-strapped rival LeEco faces a crippling shortage of funds, which were revealed in a public letter by CEO Jia Yueting months after the company launched its first flagship phones in the United States.

“There’s no pressing need to do an IPO or even a private round,” said Barra brushing off concerns that Xiaomi could face a similar funding shortage. “We are not a flash in someone’s PR pan.”

© Thomson Reuters 2016

Tags: Xiaomi, Hugo Barra, Mobiles, Android, China

Pokemon Go Is a Hit – Is Nintendo’s Super Mario Next?

Pokemon Go Is a Hit - Is Nintendo's Super Mario Next?

Flush with the stunning popularity of the Pokemon Go mobile game, Nintendo aims to make more from marketing popular characters such as Super Mario, taking a leaf from the Walt Disney playbook where Mickey Mouse and friends bring in billions of merchandising dollars each year.

But, where Disney’s animated characters often earn more than the films they star in, Super Mario, Pokemon and other Nintendo franchises have languished amid the Japanese firm’s reluctance to push them beyond its struggling game console platform.

The success of Pokemon Go – created by Nintendo, Pokemon Company and Niantic, a Google spinoff – may signal that Nintendo’s move to let its characters roam beyond that console universe could help revitalise a company that had grown from a card game maker in nineteenth century Kyoto to the world’s top computer game and console maker.

(Also see: Pokemon Go iOS: How to Download Pokemon Go for iPhone, iPad)

“We are now expanding how we leverage Nintendo IP in various ways beyond our traditional use of them predominantly within the dedicated video game platform business,” Tatsumi Kimishima, the company’s president, wrote in a message to investors.

It could be sitting on a goldmine.

“We believe the value of Nintendo intellectual property is enormous and will eventually be unlocked over a 3-5 year period,” Jefferies analyst Atul Goyal wrote in a Monday research note.

(Also see:  This Pokemon Go Map Will Show You Every Pokemon Location)

A spokesman for Japanese toymaker Takara Tomy said: “We are seeing a resurgence of interest in Pokemon toys after the launch of Pokemon Go.”

Nintendo, which on Wednesday partly blamed a strengthening yen for its April-June operating loss, is said to be doing more to expand the reach of its popular franchise characters, which also include The Legend of Zelda.

“Nintendo used to have only few people in its licensing business and deal only with a limited number of merchandising companies,” said a toy company official, who asked not to be named as he is not authorised to talk to the media. “That’s gradually changing as the company has made it clear it will boost its IP business.”

(Also see: How to Download Pokemon Go APK, Install, and Play on Android)

Shigeru Miyamoto, the creator of the puppet-inspired Super Mario, has indicated Nintendo has more appetite now to allow its franchise characters to spread beyond console gaming, and into revenue generating licensing agreements.

“These projects will take time to bear fruit, but they are something to look forward to,” Miyamoto told Nintendo’s shareholder meeting late last month, adding Nintendo had started licensing characters for attractions at Universal Studios theme parks and was working to expand Nintendo products.

Faded Wii
Since its Wii game console boom faded four years ago and its successor, the Wii U, flopped, Nintendo has been buffeted by losses that have more than halved its cash pile to around $5 billion.

Nintendo sold almost 100 million of its Wii consoles between its late-2006 launch and end-2011, the year before the Wii U was released. Subsequent sales of the Wii U have added only 13 million units. As casual gaming has shifted from the living room to the smartphone, sales of its handheld 3DS video game system are just a third of the older DS model.

(Also see:  This Pokemon Go Map Will Show You Every Pokemon Location)

Wary of losing focus on its ailing console business, Nintendo has largely steered clear from producing games for other platforms or agreeing lucrative licensing agreements.

In the year to end-March, the company’s licensing revenue was just 5.7 billion yen ($54.2 million) – around 1 percent of overall sales, and a tiny fraction of what Disney earns from the likes of Mickey Mouse, Toy Story, Winnie the Pooh and, more recently, Star Wars.

Disney’s revenue from consumer products – from Mickey Mouse tea pots and tie clips to books, magazines and even English language schools in China – totalled $4.5 billion in its last full business year – around 9 percent of its total sales.

(Also see: How to Play Pokemon Go in India? Here’s Everything You Need to Know)

It was Disney’s fastest growing business segment in the year to Oct. 3, 2015, with operating profit up 29 percent from a year earlier. While the Toy Story 3 movie, released in 2010, earned Disney $1.7 billion at cinemas and from TV broadcasts, the franchise’s licensed toys, books and a smartphone app have brought in $7.3 billion.

That’s a merchandising masterclass that some investors reckon Nintendo will struggle to match.

“Monetising IP is a whole different thing from selling games,” said a fund manager at a Japanese asset management firm which owns Nintendo shares.

“They say they’re going to sell a wrist watch, but it’s adults who are playing Pokemon GO … and are they going to wear a Pokemon GO Plus watch?”

Tags: Apps, Gaming, Mario, Niantic, Nintendo, Pokemon, Pokemon Go, Super Mario

Oppo R9, R9 Plus Hit Certification Site; Design and Specifications Tipped

Oppo R9, R9 Plus Hit Certification Site; Design and Specifications Tipped

Earlier this week we saw a couple of teasers indicating Oppo might launch its R9 smartphone at an event on March 17. Now the smartphone, alongside with a ‘Plus’ variant, appear to have passed Tenaa, the Chinese telecommunications certification authority. The listing reveals some high-end specifications and images – while both the Oppo R9 and the Oppo R9 Plus look identical in terms of design.

The Oppo R9 and the Oppo R9 Plus feature what looks like a physical home button below the display. A front-facing camera besides the speaker grille and sensors are also visible at the top. The back panel sports the company logo at the centre along with a camera placed at top-left corner along with a LED flash. Both sport a metal build.

The dual-SIM supporting Oppo R9 as per the listing runs Android 5.1 Lollipop out-of-the-box and features a 5.5-inch ful-HD (1080×1920 pixels) resolution Amoled display. It is powered by an octa-core processor clocked at 1.95GHz, which clearly is not the Qualcomm Snapdragon 820 processor that the smartphone was previously tipped to sport, as the Snapdragon 820 is a quad-core offering. The smartphone also houses 4GB of RAM alongside 32GB inbuilt storage, which can be expanded via a microSD card (up to 128GB). Other features mentioned are 4G LTE support and 2850mAh battery. Both the front-facing and rear camera are seen sporting 16-megapixel sensors, indicating it to be a camera-focussed smartphone like rumoured previously. It measures 151.8×74.3×6.5mm and weighs 145 grams.

As for the dual-SIM Oppo R9 Plus, the smartphone is seen with a larger 6-inch full-HD Amoled display, an octa-core processor clocked at 1.8GHz, 64GB of expandable storage, and a 4120mAh battery. The RAM and camera specifications stay the same as its smaller sibling. The smartphone runs Android 5.0 Lollipop out-of-the-box, measures 163×80.8×7.4mm, and weighs 185 grams.

The Chinese tech firm has posted some new teaser images for its R9 smartphones, indicating them to feature Oppo’s native VOOC fast charging. This will let the smartphone deliver 2 hours of talk time in just 5 minutes of charging. The tech is not to be mistaken with the company’s Super VOOC Flash Charge, which it introduced last month during MWC 2016. The technology can charge a 2500mAh battery from 0 to 100 percent in 15 minutes flat.


Equity Mutual Funds’ Assets Hit 5-Month Low

Equity Mutual Funds' Assets Hit 5-Month LowAsset base of equity mutual funds declined to Rs 3.45 lakh crore, its lowest level in five months, at the end of January due to weak inflows in such schemes. Prior to this decline, asset base of equity MFs has been continuously rising since August last year.

Market experts attributed the slump in assets under management (AUM) to sluggish inflow in equity and equity linked schemes.

Equity mutual funds witnessed an inflow worth just Rs 2,914 crore, the lowest level in the last 20 months, due to sluggish stock markets and appreciation in gold prices. However, equity MFs saw an average monthly inflow of Rs 7,550 crore in 2015.

The industry’s equity AUM dropped from Rs 3.64 lakh crore in December to Rs 3.45 lakh crore in January this year, according to Association of Mutual Funds in India (AMFI). This was the lowest since August, when the assets base of equity mutual funds stood at Rs 3.43 lakh crore.

Asset base of equity MFs was at Rs 3.62 lakh crore and Rs 3.56 lakh crore and Rs 3.47 lakh crore in November, October and September, respectively. It stood at Rs 3.52 lakh crore in July.

Despite moderation in inflows, local MFs continued to be biggest institutional investors in January. MFs made a net investment of $1.1 billion in stock markets during the period under review.

However, market experts believe that if the moderation in inflow persists, domestic MFs may not remain biggest institutional buyer of Indian equities in the near term.

Meanwhile, the 30-share benchmark index Sensex plunged by nearly 5 per cent last month.

Mutual fund is an investment vehicle with a pool of funds collected from investors to buy securities such as stocks, bonds, money market instruments and similar assets.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)