Xiaomi Releases New Products after IPO

Source:iResearch August 06,20188:37 AM
Xiaomi released 3 new products over the past two weeks: Mi MAX3 smartphone, Mijia smart air conditioner and Mijia smartwatch.
Mi MAX was initially launched by Xiaomi in 2016 focusing on the big screen smartphone market. The newly released model Mi MAX3 is equipped with a 6’99’’ inches screen, a 5500 mAh battery and 12MP+5MP dual cameras on the back. Such hardware features are considered as major improvements over the previous Mi MAX2. However, the limited upgrade of CPU (Snapdragon 636) fails some of its fans’ expectations.
Mijia smart air conditioner was unveiled on July 23. The smart appliance features app control, voice commands as well as temperature adjustment with an accuracy of 0.1 degrees Celsius. Priced at RMB1999, the air conditioner is slightly cheaper than products with similar configuration from Gree and Midea, which are sold at the range of RMB2,399 to RMB2,999.
The new Mijia smartwatch has been available in Xiaomi’s online and offline stores since July 17. The hybrid watch is limited in smart features, simply including step recordand automatic time calibration. The affordable price of RMB349 seems to be key selling point compared with similar smart quartz watches on sale (e.g. Nokia steel).

iResearch’s view: The new products will bring no surprise to the market in our view. We stay with our previous estimates of smartphone and consumer IoT sales in 2018. 

First, the new smartphone doesn’t appear to be distinctive in the market. Mi MAX2, which was released a year ago, has rather similar battery life and screen size to those of MAX3’s.The upgrade of CPU and camera is not attractive as well. Though being less competitive in terms of battery life, Xiaomi 6X also stands in the way of MAX3 sales with a better CPU(Snapdragon 660) and a lower price. Meanwhile, Huawei has lately affirmed that its Honor Note 10 would be released on July 31. Featuring similar screen size and battery life, this upcoming flagship product outperforms MAX3 in both front and back cameras. The market Mi MAX3 faces now could be less promising than expected. We estimate the total shipments of Mi MAX3 could hardly exceed 3 million in China, which corresponds to the accumulative unit shipments of Mi MAX2.

Second, we think air conditioner is a good supplement to Xiaomi’s consumer IoT ecosystem. However, Xiaomi has no track record of success in white appliances.
Smartmi air conditioner, which was released in 2017 by a Mi Ecosystem company, has already been proved to be a disappointment in terms of sales volume. Given the price and features of Mijia smart air conditioner, we are not positive the product could take a sizable market share from two dominant players Gree and Midea. No meaningful financial impact is visible in the near term per our estimates.
Lastly on smartwatch, we think the new smartwatch won’t bring significant incremental revenue to Xiaomi, given that growth of smartwatch market is stagnant and Xiaomi’s smartwatch product does not stand out from the crowd.

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