AsianFin -- Transsion Holdings, long hailed as the "King of Africa" for its dominance in the continent's smartphone market, is now facing one of its toughest tests yet amid intensifying global competition and rising supply chain costs.
The Chinese smartphone maker posted a steep 69.87% year-over-year drop in net profit for the first quarter of 2025, falling to 490 million yuan ($67.6 million), according to its latest earnings report. Revenue slumped 25.45% to 13 billion yuan ($1.8 billion).
Once the world's fourth-largest smartphone maker with 28.5 million units shipped in Q1 2024, Transsion has now slipped out of the global top five, with quarterly sales dipping below 22.7 million units.
The collapse in earnings and market share comes as the company faces what it describes as "dual pressures" from fierce market competition and surging supply chain costs, both of which have severely squeezed margins. Transsion's net profit, excluding non-recurring items, tumbled 74.64% to just 343 million yuan, while basic earnings per share sank over 70% to 0.43 yuan.
Cash flow also took a hit. Operating cash flow came in at negative 741 million yuan, deepening the loss from a year earlier.
Transsion's success has historically hinged on ultra-affordable smartphones, with brands like Tecno, Infinix, and Itel dominating low-income segments across Africa and other emerging markets. But that low-cost model is increasingly under strain.
DRAM and NAND Flash prices have surged by double digits in 2024, and system-on-chip (SoC) costs continue to rise, according to TrendForce and industry executives.
Attempting to pivot upmarket, Transsion launched a foldable smartphone under its Infinix brand in 2024 at an $800 price point. However, the device struggled with quality issues and limited channel reach, leading to a commercial failure.
"If the company fails to sustain product innovation while improving quality and service levels," Transsion warned in an earlier filing, "it may struggle to maintain its competitive edge."
Transsion is also facing mounting pressure in its core African market, where it once enjoyed unrivaled dominance. Xiaomi's budget Redmi lineup, with models like the 10A and 12C priced below $100, gained rapid traction. Xiaomi's African shipments grew 38% year over year in 2024 to 8.4 million units, capturing an 11% market share, according to Canalys.
Realme, another budget-focused Chinese brand, is also rising fast. Leveraging its Note series, the company saw 89% year-over-year shipment growth in Africa, delivering 3.8 million units and taking fourth place in the regional rankings.
Efforts to expand into new markets have yet to yield meaningful gains. In India, Transsion faces entrenched competition from OPPO, Vivo, and Xiaomi. In Southeast Asia and Latin America, its market share remains well behind top players like Samsung, Motorola, and Xiaomi.
Even in the high-growth Middle East, where smartphone shipments excluding Turkey rose 14% in 2024, Transsion posted modest 9% growth. Xiaomi, by contrast, saw shipments surge 33%.
With its home turf under siege and global ambitions stalling, investor sentiment has soured. Transsion's stock has slumped nearly 30% since February, dropping from 113.51 yuan to 71.78 yuan.
As the competitive landscape across emerging markets evolves rapidly, Transsion's next moves will be crucial in determining whether it can reclaim lost ground or risk fading into the ranks of "others" in the global smartphone race.
(Note: 1 USD equals about 7,25 yuan)
