Xiaomi buys self-driving tech startup to propel EV ambitions


While other details about Xiaomi’s car-making efforts remain unclear, it’s kicked off a hiring spree of 500 engineers for the project and has talked to multiple automakers and local authorities for potential partnerships. — Bloomberg

Xiaomi Corp will buy autonomous driving technology startup Deepmotion for about US$77.4mil (RM324.46mil), sealing a deal to help further its ambitions of getting into the fast-expanding field.

The company announced the acquisition after reporting better-than-expected results for the second quarter, when a recovery in key markets like India helped it overtake Apple Inc to become the world’s second-largest phone vendor by shipments. Revenue surged 64% to 87.79bil yuan (RM56.76bil) in the quarter ended June, surpassing the 85.01bil yuan (RM54.96bil) average of estimates.

Co-founder and chief executive officer Lei Jun is now spearheading a drive to take Xiaomi beyond smartphones. The 51-year-old is personally leading a project to make electric vehicles and the company has pledged an initial investment of US$10bil (RM41.92bil) over the next decade in the business. Lei has said the company has deep enough pockets to fund such a project, which requires years of heavy investment in development and manufacturing before the first car can even be sold.

The acquisition of four-year-old Deepmotion, which develops driver assistance software, is the latest in a series of moves Xiaomi’s making to delve deeper into a crowded field. A number of tech giants from Huawei Technologies Co to Baidu Inc have already spent years developing components and auto-driving technologies.

President Wang Xiang said Wednesday the purchase is intended to help Xiaomi develop Level 4 self-driving technology, which allows full autonomous driving.

“Through this acquisition, we hope to shorten the time to market for our product,” Wang told reporters after releasing results. “We want to speed up our autonomous driving R&D.”

While other details about Xiaomi’s car-making efforts remain unclear, it’s kicked off a hiring spree of 500 engineers for the project and has talked to multiple automakers and local authorities for potential partnerships. The company has also looked at investing in Black Sesame Technologies, a startup that develops artificial intelligence chips and systems for cars, Bloomberg News reported earlier this year.

On Wednesday, Xiaomi reported net income climbed more than 80% to 8.27bil yuan (RM5.34bil) in the three months ended June. It seized the No. 2 position globally for the first time during the quarter, in part after shipments in India almost doubled from a year earlier, according to reports from research firm IDC. Lei this month set his sights on reaching the top spot within three years.

After first gaining fame as a vendor of low-end phones sold through e-commerce channels in China, Xiaomi has been trying to overhaul its image with sleek designs and more sophisticated gadgets. The 11-year-old firm this month unveiled a handset – featuring the latest Qualcomm Inc. processors and a front-facing camera hidden under the display – that’s positioned to take on Apple’s iPhones in the luxury market.

“We view Xiaomi’s high-end smartphone strategy favourably, and think the segment will enjoy profitability in 2021,” CICC analyst Hu Peng wrote in a memo ahead of the earnings release.

Shares of Xiaomi were largely unchanged in Hong Kong on Wednesday before the results were announced. Its stock has dropped nearly a quarter this year, in part because of a tech selloff, while the benchmark Hang Seng Index dipped 6%. – Bloomberg

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights
   

Next In Tech News

Five tips to help seniors avoid scams this holiday season
Google to give additional staff bonus this year
Australia's central bank sceptical on digital A$, but that could change
Tech Q&A: Why a game freezes on Chrome and Edge, but not Firefox
Head of U.S. Senate panel asks regulator to probe Facebook's ad practices
GameStop discloses SEC subpoena on trading activity, posts bigger-than-expected loss
European activists fight for right to repair electronics
Apple wins last-minute reprieve from App Store changes while 'Fortnite' appeal plays out
VW Americas CEO sees chip shortage lasting into 2022, but industry protecting margins
Do not compensate investors for crypto losses, UK financial watchdog CEO says

Others Also Read


Vouchers