Smartphone maker Xiaomi is buying autonomous driving technology startup Deepmotion for USD77.4 million as it plans to expand its presence in the competitive market.
The company announced the acquisition after reporting a 64% revenue surge to 87.79 billion yuan (USD13.6 billion) in the quarter ended June, surpassing the 85.01 billion yuan average of estimates. The better-than-expected results for the second quarter was helped by recovery in key markets like India and the US government sanctions against rival Huawei.
Sales were up from 53.54 billion a year earlier. Net income reached 6.32 billion yuan, up 87.4% year on year and above analyst expectations.
Xiaomi’s share of the global smartphone market grew 83% year-on-year in the quarter ending June, according to research firm Canalys. It shipped 52.8 million phones, making it the world’s second top-selling brand for the first time in its history, behind Samsung and ahead of Apple.
Co-founder and Chief Executive Officer Lei Jun is now spearheading a drive to take Xiaomi beyond smartphones. Jun is personally leading a project to make electric vehicles and the company, in March this year, pledged an initial investment of USD10 billion over the next decade in the business. Such a project requires years of heavy investment in development and manufacturing before the first car can even be sold.
The acquisition of Deepmotion, which develops driver assistance software, is the latest in a series of moves Xiaomi is making to delve deeper into a crowded field. A number of tech giants – from Huawei Technologies to Baidu – have already spent years developing components and auto-driving technologies.
“Through this acquisition, we hope to shorten the time to market for our product,” President Wang Xiang said. “We want to speed up our autonomous driving R&D.”
Bloomberg reported that Xiaomi 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.
