Chinese Android-based phone maker Xiaomi said it will produce 15 million handsets for this year, and expects no overstock. This is double the 7.19 million units that were sold in 2012, which netted the firm 12.6 billion RMB ($2 billion) in revenue after tax.
Its CEO and founder, Lei Jun, said that the firm is going to produce as many handsets as it expects to sell, because it doesn’t intend to hold any overstock. Xiaomi has been accused of deliberately underproducing in order to falsely raise demand for its phones. Lei said that the company doesn’t intend to waste resources overproducing, but admitted that producing only to demand has delayed delivery dates by about three to four months per batch.
The company’s flagship phone, the Mi2, sells for just 1,999 RMB (US$318).
Hans Tung, a partner at Qiming Venture Partners and an investor in Xiaomi, has said in reports that Xiaomi makes about 10 percent profit on its handsets, translating to 1.2 billion RMB ($190 million) in profit for 2012. This exceeded the profit margins of other Chinese handset vendors such as ZTE, Huawei and Lenovo.