'Net Profit Up 80%' Xiaomi Acquires Autonomous Driving Startup 'DeepMotion'

[Asia Economy Reporter Park Byung-hee] Xiaomi is set to acquire autonomous driving startup DeepMotion for about $77.4 million (approximately 90.4 billion KRW), Bloomberg reported on the 25th (local time).

Xiaomi announced the DeepMotion acquisition plan after releasing better-than-expected Q2 earnings on the same day.

Major Chinese IT companies such as Huawei and Baidu have recently been investing in the electric vehicle market beyond their core businesses, and Xiaomi is no exception. Lei Jun, Xiaomi's co-founder and CEO, announced plans to invest $10 billion in the electric vehicle business over the next 10 years. He emphasized that large-scale investments will be needed for several years before selling the first car and that Xiaomi has sufficient funds required for the electric vehicle business.

Wang Xiang, President of Xiaomi, said that DeepMotion will help advance autonomous driving technology to Level 4, which refers to a level of fully autonomous driving. Wang stated, "We hope that the acquisition of DeepMotion will shorten the time until Xiaomi's electric vehicles hit the market," adding, "We will accelerate the development speed of autonomous driving technology."

Xiaomi has not yet disclosed specific plans for electric vehicle development. However, it is recruiting 500 engineers for the electric vehicle division and discussing collaborations with various domestic and international automakers. Xiaomi is also reportedly considering investing in Black Sesame Technologies, a startup developing AI semiconductors and systems for automobiles.

Xiaomi 'Mi Mix Fold' [Photo by EPA Yonhap News]

Xiaomi's Q2 revenue surged 64% year-on-year to 87.8 billion yuan, surpassing the analyst consensus average of 85 billion yuan compiled by Bloomberg. Net profit in Q2 rose more than 80% to 8.27 billion yuan.

According to market research firm IDC, Xiaomi overtook Apple for the first time ever to become the world's second-largest smartphone vendor in Q2 this year based on shipment volume. Shipments in key markets, including India where shipments nearly doubled, increased significantly.

Last month, CEO Lei expressed confidence that Xiaomi could become the world's number one within three years, referring to competitor Huawei struggling in the smartphone market due to U.S. sanctions.

Founded 11 years ago, Xiaomi initially gained popularity with low-cost products but has recently been actively targeting the high-end smartphone market.

Hu Feng, an analyst at CICC, said, "We view Xiaomi's high-end smartphone market strategy positively," adding, "Good profits are expected this year."

This content was produced with the assistance of AI translation services.