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Northline Post.

Mobile phones

Xiaomi

HKEX: 1810 · OTC: XIACY · China

Xiaomi sells phones at a hardware margin it has publicly capped at five per cent and makes its money on the services and advertising that run on them, which makes it a distribution business wearing a manufacturer's clothes. It is now also building electric cars on the same logic, so the number worth watching is whether the hardware margin holds while a second, far more capital-hungry product line scales.

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