Xiaomi admits it doesn't profit from selling smartphones

Xiaomi's business model is not about selling smartphones; profit growth will be driven from its smart home devices and revenue from its software eco-system, said Xiaomi global VP and former Android VP Hugo Barra in an interview with Reuters."Basically we're giving [handsets] to you without making any money… we care about the recurring revenue streams over many years," Barra said in the interview, "We could sell 10 billion smartphones and we wouldn't make a single dime in profits."The senior executive said the statement when he was commenting on a drop in Xiaomi's smartphone sales in China, in which the company missed its global smartphone targets by 12% last year, and its third-quarter China smartphone sales were down 45%, according to figures from IDC.Xiaomi has increasingly focusing on other devices, such as home appliances like air and water purifiers, and rice cookers as key earnings drivers. In April, Xiaomi vicepresident Liu De said the firm expects sales of smart home devices to double to 10 billion yuan ($1.5 billion) this year.Barra said based on its current business model, the drop would not impact the company's long-term profit growth.He added that the company is looking forward to CES next year, where the company is participating for the first time, and is set to unveil a new product there.