Smart TVs add fuel to Xiaomi’s Q1 earnings

Chinese smartphone company Xiaomi just released its first quarterly results since announcing its $1.48 billion pledge to focus on smartphones and ‘AIoT’, an acronym for Internet of Things powered by artificial intelligence.

Xiaomi’s adjusted net profit for the first quarter increased 22.4 percent year-over-year to 2.1 billion yuan ($300 million), while total revenue climbed 27.2 percent to 43.8 billion yuan ($6.33 billion).

Sales in India, where Xiaomi handsets dominate, as well as other countries outside China, continued to be a bright spot for the company. International markets brought in 38 percent of its total revenue over the first quarter, representing a 35 percent increase. Xiaomi’s overseas momentum came amid a global slowdown in the smartphone sector and at a time its rival Huawei copes with a technology ban that threatens to hobble international sales.

Smartphones remained as Xiaomi’s biggest revenue driver, though the segment had shrunk from 67.5 percent of total revenue in Q1 of 2018 to 61.7 percent a year later. According to Canalys, Xiaomi was the world’s fourth-largest smartphone maker by units shipped in the first quarter. A brand traditionally popular among male consumers, Xiaomi has made efforts to court female users by taking over Meitu’s smartphone business that would allow it to sell selfie-optimizing devices.

Xiaomi’s ‘IoT and lifestyle’ unit, which churns out a wide range of home appliances from air purifiers to suitcases, saw its share of revenue jump from 22.4 percent to 27.5 percent year-over-year.

Xiaomi said growth of this segment was primarily driven by smart TV sales, a new area of focus at the smartphone company. In January, Xiaomi announced taking a 0.48 percent stake in TV manufacturer TCL, deepening an existing alliance that saw the two work together to integrate Xiaomi’s operating system into TCL products.

Xiaomi has long tried to differentiate itself from other hardware firms by making money not just from gadgets but also from software and internet services sold through those devices. But the latter portion is still relatively paltry, accounting for just 9.7 percent of Xiaomi’s total revenue, compared to 9.1 percent a year before.

As of March, Xiaomi owned 261 million monthly active users through its MIUI operating system installed across all devices, a 37.3 percent growth YoY. The number of IoT devices, excluding smartphones and laptops, jumped 70 percent to reach approximately 171.0 million units.

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Google quietly shelves custom Pixel phone cases

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Google’s Pixel 3a might have been good news for fans of mid-range phones, but it marked the death knell for one of the company’s signature phone features: its customizable cases. The 9to5Google crew has discovered that Google axed the personalized My Cases it introduced alongside the Pixel 3, leaving you with just the ordinary fabric cases if you insist on getting official protection. The company’s support page now says that the accessories are “no longer sold by Google.”

The company introduced Live Cases back in early 2016 for the Nexus 5X, 6 and 6P, using a clever NFC feature to provide wallpaper that matched the shell on your phone. Google dropped NFC when the Pixel 2 rolled around, and switched to its photo-based My Cases for the Pixel 3.

While the move is unfortunate for anyone who wanted a truly one-of-a-kind phone, it’s not surprising. Google is now selling four phones, which could add to the challenge of offering cases in large-enough volumes. There’s also the simple matter of cost cutting. The company may be under greater pressure to turn a profit from its phone business, and that could mean cutting non-essentials like My Case.

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Google suspends Huawei's Android support (updated)

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Cherlynn Low/Engadget

Huawei was already facing serious trouble following the Trump administration’s de facto ban, but it might get considerably worse. Reuters sources claim Google has suspended transactions with Huawei that require transferring proprietary hardware and software, hobbling much of its smartphone business outside of China. It “immediately” loses access to future OS updates beyond the Android Open Source Project, according to the insider, and upcoming phones would have to go without official apps like the Google Play Store and Gmail.

The company is still “internally” discussing which services are going away, the source said. Google would cut off all tech support and collaboration for Android and services, however.

We’ve asked Google for comment. If accurate, though, the suspension would represent a serious blow to Huawei’s mobile efforts. Although this shouldn’t dent the company’s Chinese business much (it can’t use Google apps in the country), it depends on access to Google apps to remain competitive with devices like the P30 Pro. So long as the US blacklisting persists, Huawei might have to rely on third-party apps and services just to offer fully functional handsets — and there’s no guarantee customers will be receptive to the change.

Update 5/19 5:15PM ET: Engadget understands that the report is accurate, although there will be a slight reprieve. Updates for Play Services and apps will still go through, as they don’t require that Google interacts with Huawei. OS and security updates, however, are strictly off-limits.

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Upscaled: How do you build a foldable screen?

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In our show Upscaled we try and dig into the science and engineering behind our favorite bits of tech. In this episode, we’re taking a close look at foldable OLEDs. Despite Samsung’s Galaxy Fold being delayed, the Huawei Mate X is expected within the next few months, and Xiaomi and Lenovo have both showed off foldable prototypes.

OLEDs themselves are still relatively new technology in consumer devices, and making them foldable adds an extra layer of complexity. We’ll examine how OLEDs themselves are constructed, and the materials and engineering that goes in to making a screen you can fold in half.

So what do you think? Are you still excited for foldable devices? Despite the setbacks, all signs point us moving towards a brand new flexible world of electronics.

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The state of the smartphone

A few manufacturers have managed to buck global trends. Can 5G and foldables turn things around for the rest?

Earlier this month, Canalys used the word “freefall” to describe its latest reporting. Global shipments fell 6.8% year over year. At 313.9 million, they were at their lowest level in nearly half a decade.

Of the major players, Apple was easily the hardest hit, falling 23.2% year over year. The firm says that’s the “largest single-quarter decline in the history of the iPhone.” And it’s not an anomaly, either. It’s part of a continued slide for the company, seen most recently in its Q1 earnings, which found the handset once again missing Wall Street expectations. That came on the tale of a quarter in which Apple announced it would no longer be reporting sales figures.

Tim Cook has placed much of the iPhone’s slide at the feet of a disappointing Chinese market. It’s been a tough nut for the company to crack, in part due to a slowing national economy. But there’s more to it than that. Trade tensions and increasing tariffs have certainly played a role — and things look like they’ll be getting worse before they get better on that front, with a recent bump from a 10 to 25% tariff bump on $60 billion in U.S. goods.

It’s important to keep in mind here that many handsets, regardless of country of origin, contain both Chinese and American components. On the U.S. side of the equation, that includes nearly ubiquitous elements like Qualcomm processors and a Google-designed operating system. But the causes of a stagnating (and now declining) smartphone market date back well before the current administration began sowing the seeds of a trade war with China.

Image via Miguel Candela/SOPA Images/LightRocket via Getty ImagesThe underlying factors are many. For one thing, smartphones simply may be too good. It’s an odd notion, but an intense battle between premium phone manufacturers may have resulted in handsets that are simply too good to warrant the long-standing two-year upgrade cycle. NPD Executive Director Brad Akyuz tells TechCrunch that the average smartphone flagship user tends to hold onto their phones for around 30 months — or exactly two-and-a-half years.

That’s a pretty dramatic change from the days when smartphone purchases were driven almost exclusively by contracts. Smartphone upgrades here in the States were driven by the standard 24-month contract cycle. When one lapsed, it seemed all but a given that the customer would purchase the latest version of the heavily subsidized contract.

But as smartphone build quality has increased, so too have prices, as manufacturers have raised margins in order to offset declining sales volume. “All of a sudden, these devices became more expensive, and you can see that average selling price trend going through the roof,” says Akyuz. “It’s been crazy, especially on the high end.”

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