On the afternoon of May 20th, XIAOMI Group released its results for the first quarter of 2020. According to the financial report, the income of IoT and consumer products was 13 billion yuan in the first quarter of 2020. This part of the revenue still achieved 7.8% year-on-year growth.

Intelligent mobile phone

Our smartphone revenue reached 30.3 billion yuan in the first quarter of 2020, an annual growth rate of 12.3%. In the first quarter of 2020, smartphone sales reached 29.2 million, an increase of 4.7% over the same period last year. According to Canalys, our market share of global smartphone expansion rose to 11.1% in the first quarter of 2020, ranking fourth in the world. It is the only one of the top five mobile phone manufacturers to supplement sustainable growth.

In the first quarter of 2020, we continued to promote the mobile phone dual-brand strategy and achieved remarkable results. The XIAOMI 10 and XIAOMI 10 Pro released by us in February 2020 give full play to their superior performance and are welcomed by the market. two months after the release, the number of units has gradually expanded to more than 1 million, representing the gratifying progress of the XIAOMI brand towards high-end development. XIAOMI 10 and XIAOMI 10 Pro were released in the overseas market at the end of March, reducing from 799 euros and 999 euros. Driven by high-end simulations such as 5G, our global average smartphone length ("ASP") continued to increase by 7.2% in the first quarter of 2020. In the first quarter of 2020, the average segmentation time of our smartphones in the Chinese mainland market grew by 18.7%, while that in the overseas market surpassed the increase of 13.7%.

Internet of things and living consumption products

In the first quarter of 2020, the income from the Internet of things and consumer products was 13 billion yuan. In addition, the production, transportation and installation of some categories, such as large household appliances, were affected by the epidemic, but revenue grew by 7.8% thanks to the diversity of our IoT categories and a viable business base.

Our smart TV business continues to maintain a leading position in Chinese mainland and overseas markets. In the first quarter of 2020, despite the overall growth of sales in the global TV market affected by the epidemic, the global replacement of our smart TV is still according to Oviyun Network ("OviCloud") statistics. XIAOMI TV firmly ranked first in the restructuring of Chinese mainland TV in the first quarter of 2020 for the fifth consecutive quarter, and ranked in the top five in global TV delivery.

Internet Service

In the first quarter of 2020, our Internet service revenue reached 5.9 billion yuan, an annual growth rate of 38.6%, accounting for 11.9% of total revenue.

The user activity and duration of our Internet services increased significantly in the first quarter of 2020. In March 2020, the number of monthly active users of MIUI reached 330.7 million, an increase of 26.7% over the same period last year. Among them, the number of monthly active users of MIUI in Chinese mainland region was 111.5 million.

In the first quarter of 2020, advertising revenue reached 2.7 billion yuan, an increase of 16.6% over the same period last year. Although the advertising budget in some vertical areas has been reduced due to the impact of the epidemic, we have achieved continuous development of more vertical customer sources and continuous optimization of recommendation algorithms through diversified ways of realization, such as search, preloading, information flow, and so on. partially resist the impact of the epidemic. At the same time, overseas Internet advertising revenue increased strongly in the first quarter of 2020, which enabled them to achieve the annual growth of overall advertising revenue.

In the first quarter of 2020, game revenue reached 1.5 billion yuan, an annual growth rate of 80.5%, mainly due to the good performance of the Chinese mainland game market and the higher average game revenue per user brought by our high-end mobile phones.

In the first quarter of 2020, revenue from Internet services other than Chinese mainland smartphone advertising and games, including merchandise e-commerce platforms, financial technology business, TV Internet services and overseas Internet services, increased by 71.5% year-on-year, accounting for 38.1% of the total Internet service revenue.

Among them the product e-commerce platform continues to provide a wide range of goods to provide uninterrupted services to consumers and the number of new users increased significantly in the first quarter of 2020 providing a basis for further development.

In the first quarter of 2020, in the current market transition environment, financial technology business will strengthen risk control, optimize user structure, lay a good business foundation, and prepare for sustained and healthy development in the future. Supply chain finance business provides financial services to high-quality enterprises during the epidemic.

In the first quarter of 2020, film, television and other subscription services in the TV Internet business have become an important form of entertainment for more consumers. Thanks to the formation of users' subscription habits on our platform, we found that subscription revenue is growing rapidly. In March 2020, the number of monthly active users of smart TV and XIAOMI box reached 30.4 million, an increase of 46.8%; the number of bidding users increased by 53.7% to 4.3 million per year.

Through the good potential of the rapid growth of overseas mobile phone business, our overseas Internet business continues to expand the user regulation model, not only to cooperate in various regions and advertising platforms, to enrich direct advertiser resources, but also to continuously strengthen overseas Internet services. in the first quarter of 2020, XIAOMI browser reached the first monthly active users among XIAOMI mobile phone users in the overseas market. With the continuous cultivation of overseas Internet business, our average income per user in the overseas market continues to increase.

Overseas market

In the first quarter of 2020, overseas market revenue reached 24.8 billion yuan, an annual growth rate of 47.8%, accounting for 50.0% of the total income. This is the first time in our history that the contribution of overseas income has reached half.

Our smartphone expansion in major regions of the world is on the rise. Among them, according to Canalys, our smartphone bookings in the European market grew by 58.3% a year in the first quarter of 2020, with a market share of 14.3%, ranking in the top four. According to Canalys, the batch of mobile phones in our western European market is growing at 79.3% a year. Among them, we measure 28.0% of the market share in Spain, ranking first for the first time; in Italy, France and Germany are also in the top four. In longer regions, XIAOMI still achieved a growth rate of more than 236.1% in the first quarter of 2020, ranking among the top five in market share. Our smartphone expansion in the Middle East and Africa is growing by 55.2% and 284.9% per year, respectively.

According to the IDC Global Mobile Quarterly tracking report, 2020Q1, in the first quarter of 2020, our smartphones ranked first in replenishment in India in terms of circulation for the 11th consecutive quarter, with a market share of about 31.2% in that quarter. Our continued leadership in India has also accelerated our development in the surrounding markets. According to the report, in the first quarter of 2020, we ranked first in smartphone volume in Nepal, with a market share of 30.9%, equivalent to the combined market share of second and third places.

The influence of COVID-19 epidemic situation

Under the influence of the epidemic, other overseas markets have also taken different forms of response measures, which are expected to gradually have an impact on our performance in the second quarter. India has imposed a strict blockade since the end of March, during which our sales have been affected by the siege.

Important strategic progress

5G + Internet of things

In the first quarter of 2020, we continued to promote the 5G + AIoT twin-engine strategy with remarkable achievements. In March 2020, we sold 14.1% of Chinese mainland's 5G smartphones. According to Canalys, we achieved 25.9% of the 5G market penetration in Chinese mainland, which is higher than the market average, highlighting our leading position in the 5G market.

We continue to maintain a leading position in the international Internet of things market. According to iResearch, according to the data as of December 31, 2019, according to the statistics of the number of connected Internet of things devices (excluding smartphones and laptops), XIAOMI has reached 252.0 million connected IoT devices (excluding smartphones and laptops) on our IoT platform by March 31, 2020, an annual growth rate of 42.6%. The number of users with five or more devices connected to XIAOMI's IoT platform (excluding smartphones and laptops) increased to 4.6 million, an increase of 67.9 percent over the same period last year; in March 2020, the number of monthly active users of artificial intelligence assistant "Xiao Ai" reached 70.5 million, an increase of 54.9 percent for the whole year; and in March 2020, the number of monthly active users of Micah App reached 40 million, more than an increase of 53.4 percent.

Investment

As of March 31, 2020, we have invested in more than 300 companies with a total book value of 32.3 billion yuan, an annual growth rate of 11.4%. Following the listing of Stone Technology in Science and Technology Innovation Board in February 2020, Kingsoft Cloud Holdings, a company invested by XIAOMIOn NASDAQ in May 2020Successfully listed on the market. In the first quarter of 2020, we made a net income of 225.9 million yuan after disposing of the investment tax. our investment not only brings sustainable financial gains, cooperation with the invested enterprises, but also brings us higher strategic value.