Danish Kapoor
Danish Kapoor

There is a big winner in the Apple China debacle. And it is none other than Xiaomi

The trade war between the United States and China has had a significant impact on Huawei’s role in the West, but the Asian giant has taken revenge with its threat of a potential veto of the iPhone in government agencies and companies. This has caused Apple’s sales in China to suffer, but its loss is also the gain of another large manufacturer… which is not Huawei.

Xiaomi. The company has grown spectacularly since last June: in that period its stock market valuation has increased by 20 billion dollars both due to the expectation with its new mobile phones and its entry into the electric vehicle sector. The Hang Seng Tech index of the Chinese stock market makes it clear: shares have risen 60% in recent months.


Source: Bloomberg.

Apple, down. The tension between the United States and China has claimed the iPhone as a victim this time. Tim Cook himself indicated at the beginning of November, in the call with investors, that although demand remains “strong” in China, revenue in the fourth quarter of the year would remain flat. Initial sales of the iPhone 15 in China were 6% lower than its predecessor, and both Huawei and (especially) Xiaomi are taking advantage of that drop.

The Xiaomi 14 triumphs. Since their launch at the end of October, the new Xiaomi 14 have received more than one million reservations, which is the second best debut of a Chinese smartphone in recent months after Huawei’s Mate 60 Pro. This last company is not listed on the same index as Xiaomi, but investors, instead of investing directly in it, have started investing in its suppliers.

And things promise to get better. Those recent successes are just the beginning for investors. Gokul Hariharan, an analyst at JPMorgan Chase & Co, indicated that according to his data “there is a negotiation opportunity in the next six months with the changing trends in the growth of smartphones and AIoT and the first expectations of Xiaomi’s foray into the electric vehicle”.

Huawei is also gaining ground. Xiaomi is the protagonist right now, but analysts are also clear that Huawei is another of the beneficiaries and its latest advances point to a recovery of the Chinese smartphone market next year. For Jian Shi Cortesi, from the consulting firm GAM Investment Management, in China people are not so interested in the new iPhones because “many consumers do not perceive many improvements in functionality” in them.

The HyperOS mystery. The promising advances in the cameras of the Xiaomi 14 join the premiere of HyperOS, the new operating system / customization layer that Xiaomi has developed to leave MIUI behind and, in addition, turn it into a system that later adapts to its cars electrical appliances, accessories and other devices of the Internet of Things with AI (AIoT). It remains to be seen if this platform ends up becoming something truly differentiating compared to Android.

Danish Kapoor