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Judging By Its Monstrous Revenue, Xiaomi is a Billion Dollar Company

Update: Somehow I got mixed up between P/E and revenue multiples and have made the necessary amendment below . Since we don’t know Xiaomi’s profit, it is thus easier to use revenue multiples instead. Hat tip to Raspberry Pi for pointing out. So it has been revealed that Xiaomi’s revenue is at a whopping $158 million per month. To some of us, that was quite a surprise. So if the $158 million in revenue per month stat is true, it means that Xiaomi is making more than $1.8 billion a year. Any revenue multiple would value Xiaomi at the billion dollars range. Of course some folks might argue that that is unfair and not accurate, which is true. But even at a revenue multiple of 1, Xiaomi is already a billion-dollar company, assuming that the revenue figure revealed is true. You might be wondering what the hell is Xiaomi all about. It’s a China-based company (started in 2010) that builds Android-based smartphones and an Android-based OS. It’s led by Lei Jun, an influential serial entrepreneur and angel investor in China. To find out more about the product, I have included a video review done by our Beijing editor, Charlie Custer. Xiaomi now ships more than 500,000 units of its M1 handset each month, and it is popular because of its affordable price (1999 RMB or US$313) and good quality. According to a Sina Tech report, its factory at Nanjing now produces about 25,000 units each day, which barely meets the monthly demand. Before the product is dispatched, the phones will be tested several thousand times. The failure rate is about 1.5 percent, which means about two phones out of every 100 malfunction. It’s quite a good stat but still far from the Six Sigma standard, which is approximately 3.4 defects per million units. But it’s a good start, given that Xiaomi has only been selling hardware for a year. It should get better.