Xiaomi Corp. will purchase autonomous driving expertise startup Deepmotion for about $77.4 million, sealing a deal to assist additional its ambitions of stepping into the fast-expanding area.
The firm introduced the acquisition after reporting better-than-expected outcomes for the second quarter, when a restoration in key markets like India helped it overtake Apple Inc. to turn into the world’s second-largest cellphone vendor by shipments. Revenue surged 64% to 87.79 billion yuan ($13.6 billion) within the quarter ended June, surpassing the 85.01 billion yuan common of estimates.
Co-founder and Chief Executive Officer Lei Jun is now spearheading a drive to take Xiaomi past smartphones. The 51-year-old is personally main a undertaking to make electrical automobiles and the corporate has pledged an preliminary funding of $10 billion over the following decade within the enterprise. Lei has stated the corporate has deep sufficient pockets to fund such a undertaking, which requires years of heavy funding in improvement and manufacturing earlier than the primary automotive may even be bought.
The acquisition of four-year-old Deepmotion, which develops driver help software program, is the most recent in a sequence of strikes Xiaomi’s making to delve deeper right into a crowded area. Quite a lot of tech giants from Huawei Technologies Co. to Baidu Inc. have already spent years growing elements and auto-driving applied sciences.
President Wang Xiang stated Wednesday the acquisition is meant to assist Xiaomi develop Level 4 self-driving expertise, which permits full autonomous driving.
“Through this acquisition, we hope to shorten the time to market for our product,” Wang informed reporters after releasing outcomes. “We want to speed up our autonomous driving R&D.”
While different particulars about Xiaomi’s car-making efforts stay unclear, it’s kicked off a hiring spree of 500 engineers for the undertaking and has talked to a number of automakers and native authorities for potential partnerships. The firm has additionally checked out investing in Black Sesame Technologies, a startup that develops synthetic intelligence chips and programs for automobiles, Bloomberg News reported earlier this 12 months.
On Wednesday, Xiaomi reported web revenue climbed greater than 80% to eight.27 billion yuan within the three months ended June. It seized the No. 2 place globally for the primary time in the course of the quarter, partially after shipments in India nearly doubled from a 12 months earlier, in keeping with experiences from analysis agency IDC. Lei this month set his sights on reaching the highest spot inside three years, benefiting from the waning fortunes of native rival Huawei, whose capability has been hobbled by U.S. sanctions.
After first gaining fame as a vendor of low-end telephones bought by e-commerce channels in China, Xiaomi has been making an attempt to overtake its picture with glossy designs and extra subtle devices. The 11-year-old agency this month unveiled a handset — that includes the most recent Qualcomm Inc. processors and a front-facing digicam hidden below the show — that’s positioned to tackle Apple’s iPhones within the luxurious market.
“We view Xiaomi’s high-end smartphone strategy favorably, and think the segment will enjoy profitability in 2021,” CICC analyst Hu Peng wrote in a memo forward of the earnings launch.
Shares of Xiaomi have been largely unchanged in Hong Kong on Wednesday earlier than the outcomes have been introduced. Its inventory has dropped practically 1 / 4 this 12 months, partially due to a tech selloff, whereas the benchmark Hang Seng Index dipped 6%.
