Chinese handset maker Xiaomi Corp’s (小米) newly launched 5.7-inch smartphone is expected to boost sales and profits for FIH Mobile Ltd (富智康), a unit of Taiwanese contract electronics maker Foxconn Technology Group, according US brokerage Morgan Stanley.
Xiaomi on Thursday last week unveiled the Mi Note flagship phone, which features an ultra-slim design, a more powerful processor, improved cameras and better display resolution.
The phone-tablet hybrid is available in China at 2,299 yuan (US$372).
“The newly debuted flagship model is evidence of Xiaomi’s strategy to expand its [product] portfolio in 2015,” Morgan Stanley Taipei-based analyst Jasmine Lu (呂智穎), wrote in a note to clients on Thursday last week.
“Competition is intensifying in China and overseas [expansion] will take time to bear fruit, but we believe Xiaomi can still outgrow peers via a broader mix,” Lu said.
She estimated that Xiaomi will begin mass production of the Mi Note next month or the month after, with shipments forecast to total 8 million-to-10 million units during the entire product cycle.
FIH would benefit from a higher average selling price for casings and will gain about 50 percent of the assembly orders, Lu wrote.
This means Xiaomi is expected to contribute about 13 percent of FIH’s total revenue and more than 45 percent of its gross profits this year, she said.
Lu named FIH and Hong Kong-listed AAC Technologies Holdings Inc (瑞聲科技), the main sources of Xiaomi’s acoustic and RF solutions, as the top two picks in Xiaomi’s supply chain and maintained an “overweight” rating on both stocks.
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