Agencies and Winnie Lee
Shares of Xiaomi (1810) hit a low for this year after the Beijing-headquartered multinational electronics firm admitted some of its mobile phone models in the mainland do not support Google Mobile Service.
That saw them falling 4.84 percent to HK$27.55 yesterday.
Some mainland mobile users said on the community platform for MIUI that they could not install Google Mobile Service-related services by using the new version of MIUI 12.5. So they could not use Google Play Store, Google Map, YouTube, Gmail, among others.
Xiaomi community manager responded by explaining the domestic version of MIUI would no longer support the self-installation of GMS services if Google services were not preinstalled for compliance reasons.
The phones affected include Redmi K30 and Redmi 10X 5G.
In fact, when Google withdrew from the mainland users there were shut off from Google services, but individual users could still use Google services or applications through VPN or other methods.
The US defense and treasury departments have listed Xiaomi among companies having ties to China's military and therefore shut off from investments.
Xiaomi filed a complaint in a Washington district court on Friday challenging that decision.
And UBS has put a "sell' label on Xiaomi, with a target of HK$22.
The bank described the US investment ban on the firm as perhaps the key headwind on sentiment. Xiaomi is seen to carry a potential decrease of 20.1 percent.
UBS also spoke with former Xiaomi managers regarding the competitiveness and risks of Xiaomi's phone ecosystem. According to experts, the advertising penetration intensity for Xiaomi through apps is near the maximum acceptable level for users. And if the penetration level is hit further user experience may be hurt.
The bank also said Xiaomi's artificial intelligence and data analysis systems are close to the peak of applications, and new connection penetration methods such as its "swipe-up menu" are not as effective as app stores and web browsers.
