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Wow. Again, nothing you posted proves your claim. Shipments and valuation don't prove consistent profitability of low margin hardware. Nor does a single quarter of unspecified profit supported by software and services revenue.
Here's my claim:
There is profits to be made selling high end smartphones at thin profit margin. Xiaomi has proved it.
It's very easy to prove my claim. Xiaomi has made a PROFIT. "High volume, thin profit" strategy needs VOLUME. And Xiaomi has reached that VOLUME after 2 years in the business. And they are gaining market share very fast. They are expecting an increase of 178% in smartphones sold in 2013 compare to 2012. As VOLUME increase, so will PROFITS.
"High volume, thin profit margin" strategy does have the word "profit" in it. In case you miss it.
http://www.bloomberg.com/news/2013-...ales-of-iphone-beating-handset-to-triple.html
Xiaomi Turns Profit
Xiaomi Corp., the smartphone maker that outsells Apple Inc. (AAPL) in China, has turned profitable for the first time as market-share gains put the company on pace to almost triple handset sales this year.
Sales in the first half more than doubled to 13.2 billion yuan ($2.16 billion), and may rise to 28 billion yuan for the full year, from 12.6 billion yuan for all of last year, President Bin Lin said in an interview at the company’s headquarters in Beijing yesterday. Handset sales may jump to 20 million units, from 7.19 million last year, he said. He didn’t supply a figure for profit.
The three-year-old company, which was valued at $10 billion in its latest round of funding, is expanding product offerings after selling handsets priced at about a third of the cost of Apple’s iPhone 5 in China.
You may believe that this one profitable quarter is an anomaly and that Xiaomi can't be profitable in the future. But investors (people who actually look at Xiaomi books) disagree. $4 billion valuation in 2012 turned to a $10 billion valuation 1 year later. Xiaomi must be doing something right.
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