Bloomberg News

Xiaomi Says Sony Supplier Wistron Will Make Its Smart TVs (1)

September 09, 2013

Xiaomi CEO Lei Jun

Lei Jun, chief executive officer of Xiaomi Corp. Photographer: Keith Bedford/Bloomberg

Xiaomi Corp., the smartphone maker that outsells Apple Inc. (AAPL:US) iPhones in China, said its new Internet-ready televisions will be built by Wistron Corp. to take advantage of its skill as a supplier to Sony Corp. (6758)

“Wistron builds Sony TVs so they have ample experience building high-end TVs,” Xiaomi President Bin Lin said in a Sept. 6 interview at the company’s headquarters in Beijing.

Lin declined to provide financial details or production volume for the devices. Florence Hsiao, spokeswoman for Hsinchu, Taiwan-based Wistron, didn’t respond to an e-mailed request for comment. A telephone call to her number listed on the company’s website wasn’t answered. Wistron rose as much as 1.7 percent.

After building market share by selling mobile phones priced at about a third of the iPhone 5 in China, Xiaomi is entering another market where Apple has said it’s seeking to develop products. Xiaomi next month will start selling TVs that connect to the Web and run Google Inc.’s Android operating system. The 47-inch (119-centimeter) TV will cost 2,999 yuan ($490), the company said.

The TVs will be assembled with panels supplied by LG Electronics Inc. and Samsung Electronics Co. (005930), Xiaomi Chief Executive Officer Lei Jun said Sept. 5. He didn’t disclose the manufacturer at that time.

Lenovo, Alibaba

Xiaomi joins Lenovo Group Ltd. (992), Baidu Inc. (BIDU:US) and Alibaba Group Holding Ltd. in announcing ventures to help users surf the Web and download video content or games on their TVs.

The Xiaomi order is welcome news for Wistron, which is struggling with a reduction in orders from Sony, its largest customer, Vincent Chen, an analyst at Yuanta Securities Co. in Taipei, said in a phone interview today. Wistron this year will ship about 3.2 million TVs, or less than 20 percent of its capacity of about 18 million units, Chen said.

Sony, the world’s No. 3 TV maker, posted nine straight annual losses in its TV business. The Tokyo-based company last month cut its target for sales this year to 15 million sets from 16 million.

“Wistron (3231)’s capacity is extremely empty, so they need a lot of orders to fill it up,” Chen said. “Xiaomi probably will help a little bit.”

Wistron closed 0.8 percent higher at NT$30.55 in Taipei today. The stock has risen 6.6 percent this year, compared with a 6.4 percent rise in the benchmark Taiex index.

Sales Double

Xiaomi, a three-year-old company that was valued at $10 billion in its latest round of funding, has turned profitable for the first time and is on pace to almost triple handset sales this year, Lin said.

Revenue in the first half more than doubled to 13.2 billion yuan and may rise to 28 billion yuan for the full year from 12.6 billion yuan last year, Lin said. Handset sales may jump to 20 million units from 7.19 million last year, he said.

Its newest handset, Xiaomi Phone 3, runs on all three major carriers in China. It uses both Qualcomm Inc. (QCOM:US)’s Snapdragon and Nvidia Corp.’s Tegra 4 processors and will be the world’s fastest smartphone, Lei said.

Xiaomi boosted sales with inexpensive handsets running Android. While Apple sells the iPhone 5 on its China website starting at 5,288 yuan, Xiaomi’s new handset costs 1,999 yuan.

In the China smartphone market, Xiaomi rose to sixth place in the quarter ending June 30 from eighth a year earlier, researcher Canalys said Aug. 9. Apple was seventh.

“Xiaomi wants to spread very fast and become a dominant player,” said Jeongwen Chiang, chairman of the marketing department at the Shanghai campus of the China Europe International Business School.

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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