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Xiaomi posts strong Q2 results revealing acquisition of autonomous driving startup Deepmotion

Written by AJ Cortese Published on     2 mins read

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Xiaomi’s core smartphone business is humming along as the company invests in its EV business by acquiring self-driving startup Deepmotion.

Xiaomi generated RMB 87.8 billion (USD 13.56 billion) in revenues during the second quarter of 2021, up 64% year-on-year and ahead of market expectations of RMB 85 billion (USD 13.13 billion), according to the company’s latest financial results released on Tuesday.

In June, the Beijing-based company became the world’s largest smartphone manufacturer by devices sold, and its revenue generated from smartphone sales totaled RMB 59.1 billion (USD 9.13 billion) in Q2 2021, up 86.8% YoY. Xiaomi smartphones gained popularity in the Chinese market, as the brand increased its domestic market share to 16.8% in the June quarter from 10.3% in Q2 2020.

The company’s latest quarterly results also disclosed its acquisition of autonomous driving startup Deepmotion for RMB 500 million (USD 77.4 million), marking Xiaomi’s latest move in the auto sector since the company’s CEO Lei Jun announced a USD 10 billion push into electric vehicles in March 2021. Founded in Beijing in 2017 by former Microsoft Research Asia employees, Deepmotion provides full-stack self-driving software solutions with high-precision mapping and positioning technology, along with environmental perception capabilities. The company was first reported to be an acquisition target for Xiaomi in July, at a price estimated to be between RMB 1 billion and RMB 2 billion at the time. The same month, Xiaomi posted 500 open job positions in its autonomous driving department, CFO Alain Lam told investors on the earnings call.

“We’ve been very focused on hiring the right team for our EV business and formulating our product strategy. But at the same time, we are not afraid to integrate other teams if we find that those will help us accelerate our plan,” Xiaomi’s president Wang Xiang said on the earnings call.

Revenue from Xiaomi’s IoT and lifestyle business in overseas markets experienced robust growth during Q2 2021, up 93.8% YoY as products like electric scooters and wearables gained popularity. Overall, the segment accounted for 23.6% of Xiaomi’s total revenues in the June quarter, down from 28.5% in the same period of 2020, driven by the robust growth of the company’s core smartphone business.

Read this: Xiaomi’s venture into EVs is a rough road, but the company might have what it takes to succeed

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