The EconomistNovember 7th 2020 Business 572 June. Its value surged to $80bn on Novem-
ber 5th. The main explanation is the flag-
ging performance of none other than Hua-
wei, which has been cut off from a critical
resource—mobile chips—after export re-
strictions imposed by America came into
effect on September 15th. The regulations
prohibit chip manufacturers whose pro-
ducts contain American technology, in-
cluding suppliers outside America, from
selling to Huawei, which is accused of act-
ing on behalf of the Communist Party. The
chokehold is likely to depress Huawei’s
sales for the foreseeable future.
Xiaomi is better insulated from the geo-
political storm. Unlike Huawei, which sells
telecoms gear to foreign network opera-
tors, Xiaomi runs only a consumer opera-
tion. It is thus less likely to stoke foreign
ire. Big chipmakers like Taiwan Semicon-
ductor Manufacturing Company, for in-
stance, continue to supply Xiaomi even as
they are forced to cut ties with Huawei.
New data from Canalys, a research firm,
suggest that Xiaomi is cashing in on Hua-
wei’s troubles. In the third quarter Xiaomi
shipped 47m smartphones worldwide, up
by 45% year on year. Huawei hawked more
handsets, 52m units, but that is down by
23% from a year ago and the next quarter
will almost certainly be even weaker.
Xiaomi could soon overtake Huawei to be-
come the world’s second-biggest smart-
phone vendor—behind only Samsung,
which shifted 80m units in the quarter.
Xiaomi is the undisputed winner from
Huawei’s woes. Compared with the same
period last year, third-quarter shipments
from Samsung and Apple, which dis-
patched 43m handsets, barely budged. This
suggests that consumers regard Xiaomi
smartphones as a suitable substitute for
Huawei’s products.
Like its Chinese rival, Xiaomi tries to ca-
ter to every customer. Wealthier folk favour
the flagship “Mi” phones. “Redmi” phones
are aimed at the mass market (similar to
Huawei’s “Honor” series). This explains
Xiaomi’s popularity in both developed and
developing countries. It is the leading
smartphone supplier in markets as diverse
as India and Spain. Apple’s pricey products
have less appeal in poorer countries.
The question is how long Xiaomi can
sustain its fortuitous ascent. A new admin-
istration in America may lift restrictions
against Huawei, enabling it to buy chips
from global suppliers once again. If that
happens, Xiaomi could be squeezed. To
avoid this fate it talks of building on an
“ecosystem” designed to keep customers
interested. In addition to smartphones,
which account for three-fifths of revenues,
the company sells a range of smart devices,
from light bulbs to electric scooters. It also
offers fintech services like micro-lending.
Xiaomi’s sense of inferiority could be a
thing of the past. 7
I
n barns or pens, or already in freezers,
40m American turkeys await their fate.
More than half of the whole turkeys sold in
America each year are eaten over Thanks-
giving, which this year falls on November
26th. Most of the rest are polished off the
following month, at Christmas. Social-dis-
tancing rules and travel restrictions mean
that celebrations will look rather different
in 2020—and so will the market for meat.
Some 30% of Americans say they will
spend Thanksgiving with their immediate
family only, up from 18% last year, accord-
ing to Butterball, a North Carolina firm
which rules the roost of turkey producers,
supplying one in three Thanksgiving birds.
Flight bookings for November are a third
lower than last year, reports Skyscanner, a
search platform, suggesting fewer people
are going home for the holidays. In Britain,
where 9m turkeys are usually eaten over
Christmas, 61% of people say they are less
likely than usual to have guests on Christ-
mas Day, according to Kantar, a data firm.
Birds bred to feed large gatherings are
therefore out of favour. Walmart and
Kroger, large American food retailers, both
plan to offer more small turkeys. However,
“a lot of supply for the holidays is locked in
well before the fall,” says Beth Breeding of
America’s National Turkey Federation, an
industry group. It is too late for producers
to switch to daintier varieties, since a hen
takes 14-16 weeks to mature from hatchling
to main course. Changing a bird’s diet or
the temperature of its surroundings can re-
duce its size, and it can be slaughtered ear-lier. But many Thanksgiving turkeys have
already been dispatched and frozen, to fat-
ten up inventory for the “Super Bowl” of the
turkey calendar, as a Butterball spokesman
describes it.
Some consumers may therefore end up
buying spare parts cut from big birds. Wal-
mart plans to increase by 20-30% its stock
of breast meat, for families who can’t man-
age a whole turkey. Such cuts command a
premium but may mean that the leftover
dark meat goes unsold. “Whole birds are
easier to produce and with no waste, so
producers like them,” says Richard Grif-
fiths of the British Poultry Council. Some
farmers are in a flap at the prospect that
turkey could lose out to more petite meats.
Kroger is buying in more ham, beef, pork-
roast and seafood, as well as vegetarian
“meatless roasts”.
Yet the signs are that most consumers
want to stick to tradition. Although mil-
lions of people accustomed to their moth-
er’s cooking will have to fend for them-
selves this year, convenience products will
mostly stay on the shelf, believes Scott
McKenzie of Nielsen, another data com-
pany. Lockdowns have encouraged homely
hobbies: Americans are buying 81% more
yeast than last year and 41% more seaweed
for wrapping home-made sushi, Nielsen
reckons. Mr McKenzie expects increased
demand for “made-from-scratch” products
over the holidays, and beyond: “Homebody
habits are here to stay,” he believes. If that
is true, the glut of large turkeys may have a
happy outcome: more leftovers. 7A socially distanced holiday season means less appetite for big birdsThe turkey glutGobble, gobble?
Slimming down for the holidays