Classified Documents: Millet net profit last year 560 million dollar rose 84%

According to the Wall Street Journal Online, a confidential document showed that Millet achieved a net profit of 3.46 billion yuan (about 566 million US dollars) last year, an increase of 84% per cent year-on-year. In the case of most vendors selling cheap handsets trying to achieve break-even, millet has made a profitable business out of cheap smartphones. The confidential document comes from a recent 1 billion dollar loan application from millet to the bank. Millet plans to use the funds for overseas expansion or acquisitions. Documents show that millet revenue for the last year 27 billion yuan, the year-on-year growth of more than one; Net profit is 3.46 billion yuan (about 566 million U.S. dollars), compared with 2012 's RMB 1.88 billion yuan growth 84%; Millet expects net profit growth to reach 75% this year. The rapid growth and strong performance of Millet is also a part of the broad changes in the smart machine market. Chinese manufacturers have greatly increased their influence in the smartphone market, challenging the dominance of Samsung and Apple. In the past year, China's first-line smart-machine manufacturers such as Lenovo and Huawei have been expanding overseas, posing a threat to Samsung's smartphone business in Asia, Latin America and other emerging markets. Many analysts expect Millet to use cheap smart machines to boost market share, but at the expense of profits. But Millet has made such a high profit, a possible explanation is that, despite the cheap mobile phone, but its marketing strategy is cost-effective and efficient: the document shows that millet last year's sales and marketing expenditure of 876 million yuan, accounting for 3.2% of the revenue. Millet 2012 Sales and marketing expenditure of 416 million yuan, accounting for 3.9% of the revenue. The paper also provides some details about the millet income generation. Although Millet also sells smart-machine apps and other software and services, 94% of revenues last year came from mobile sales. Mobile games and other services revenue accounted for only 1% of millet revenue. A report by IDC, the market research firm, showed that the third quarter of Millet's global smartphone share rose to 5.3%, ranking third, after Samsung and Apple.