Xiaomi’s business model isn’t about selling handsets, except insofar as those handset sales lead to recurring service revenue later on. So said Xiaomi global VP and former Android VP Hugo Barra in an interview with Reuters. The executive for the device maker was commenting on a drop in its smartphone sales in China, explaining that they wouldn’t impact the company’s long-term profit growth.
Barra explained that Xiaomi “could sell 10 billion smartphones and [the company] wouldn’t make a single dime in profits,” speaking to Reuters, adding that Xiaomi is essentially giving away its smartphones “without making any money,” because ultimately it “care[s] about the recurring revenue streams over many years” rather than immediate margins on hardware.
