Chinese smartphone vendor Xiaomi will invest at least 50 billion yuan ($7.2 billion) on 5G, artificial intelligence (AI), and Internet of Things (IoT) over the next five years as the budget phone maker is trying hard to maintain healthy business growth in the face of challenging smartphone sales.
2020 will be the year of breakthroughs for Xiaomi's 5G business, Xiaomi founder Lei Jun wrote in a new year's letter to his employees on WeChat, saying it will be a critical year for the company in its bid to push forward with smartphone and AIoT (AI+IoT) strategy -- the two core growth engines of the company.
The Beijing-based company, which initially planned to allocate about 10 billion yuan over the next five years into 5G, AI, and IoT when it first brought up the idea of "All in AIoT" in early 2019, decided to beef up investment as it has fully verified its feasibility and correctness as well as the necessity for the strategic investment, the letter said.
"In the arena of '5G+AIoT', we will invest at least 50 billion yuan in the coming five years," said Lei, who believes the new strategy will turn into an "absolute victory in all smart scenarios".
Xiaomi is facing stiff competition in its core smartphone business as other Chinese Android-makers, especially Huawei, have continued to erode the market shares of smaller players. In the third quarter of 2019, Xiaomi's smartphone shipment figures slumped 30.5% year on year in China while its global shipments also declined by 3.3%, according to IDC research notes.
The Chinese company relied heavily on growth from overseas markets and non-device segments as smartphone sales and shipments both declined in the past quarter. Smartphone shipments and sales income during the three months to September declined by 3.6% and 7.8% year on year, respectively, although revenue in the quarter increased by 5.5%.
With the first working day of 2020, January 2, marking the beginning of the 10th year of Xiaomi since its inception, Lei also shared in the letter Xiaomi's "unprecedented record" of becoming the first smart TV brand to have ever shipped more than 10 million units in China within a year during 2019.
The letter also announced that Xiaomi has recruited Chang Cheng, a former smartphone business unit head of Lenovo China, to join the company as a vice president of mobile-phone product planning. Lei added that the company would continue to hire outstanding talent from all over the world who truly reflect the company's values.
"I urge all Xiaomiers to stick with five guidelines, that we must make friends with our users, maintain the cost-effective strategy, prioritize technological innovations, insist to provide best quality products, and stick to our entrepreneurial mindset and fighting spirit," wrote Lei.
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