At one point, Chinese smart phone maker Xiaomi was deemed a potential threat to Apple Inc’s (NASDAQ:AAPL) dominance in the space. That hasn’t materialized, and the company is still feeling out its best path ahead.
CNBC has the details on the situation at hand for the Apple rival.
Chinese smart phone maker Xiaomi stumbled 6 percent on its debut on the Hong Kong Stock Exchange on Monday, but early investor Hans Tung says the company’s performance is more reflective of investor confusion than the strength of the stock.
The performance was “probably a combination of both market conditions in the U.S. and China, and investors trying to figure out if [Xiaomi] is a hardware or internet company,” Tung, GGV Capital Managing Partner, said on CNBC’s “Squawk Alley.”
To be clear, Xiaomi checks in as the fourth-biggest smartphone player globally, which is obviously an enviable position to be in. The company has put a ton of effort into growing internet and services-based revenue, but that hasn’t translated into investor enthusiasm. As Tung sees it, investors will eventually come around.
“I think over time as investors get to know Xiaomi better, will will come to view it as a different kind of hardware company than what we are used to seeing,” he said.
Apple Inc. shares were trading at $188.93 per share on Wednesday morning, down $1.42 (-0.75%). Year-to-date, AAPL has gained 12.53%, versus a 4.97% rise in the benchmark S&P 500 index during the same period.
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