Xiaomi Claimed To Be An ‘Internet Company’“”But It’s Making More Gadgets Than Ever

Xiaomi Claimed To Be An ‘Internet Company’“”But It’s Making More Gadgets Than Ever

Lei Jun, chairman and chief executive officer of Xiaomi Corp., strikes a gong as Lin Bin, cofounder ... [+] and president, left, and Laura Cha, chairwoman of Hong Kong Exchanges and Clearing, second left, look on while a representative of Mi Fan, right, celebrates during the company's listing ceremony at the Hong Kong Stock Exchange on Monday, July 9, 2018.



Anthony Kwan/Bloomberg



Xiaomi was described as "more than a hardware company“ by its billionaire cofounder Lei Jun just prior to its initial public offering in Hong Kong. But almost exactly two years after its trading debut, the company is looking distinctively like a hardware company.



The world's fourth-largest smartphone maker has been focusing more on hardware products, such as air purifiers, hair dryers, vacuum cleaners and a myriad other gadgets. Xiaomi generated $9 billion in sales from IoT and lifestyle products in 2019“”a 41.7% jump from the previous year and the largest increase among its business units.



The gross profit margin for its smartphones and other gadgets in 2019 were only 7.2% and 11.2%, respectively. Meanwhile, internet services command a profit margin of 64.7%.



Investors who bought into Xiaomi's IPO on the belief that it was an internet