Zepp Health, a smart wearable device maker which is part of Xiaomi’s ecosystem of products and services, posted falls in both revenue and profit in the fourth quarter of 2020, as the firm suffered a shipment drop during the period.

During the three-month period, Zepp Health, formerly known as Huami, saw its revenue drop 6.6% year-on-year to 2 billion yuan ($302 million) largely due to the weakening demand for products it made for Xiaomi. Meanwhile, its net profit plummeted 44% year-on-year to 115 million yuan, according its latest earnings report. The U.S.-listed company also makes money by selling its self-branded products.

This came as Zepp Health’s total shipments of wearable products including smart watches, smart bands and ear buds decreased 9.5% year-on-year to 13.3 million units in the fourth quarter, which the company attributed to the timing of new product introduction, seasonality and continued impact of the Covid-19 pandemic.

In the same period Zepp Health also reduced its spending on research and development by 7.5% year-on-year to 130 million yuan in the fourth quarter. The company said this was due to its efforts to tighten “expense control in R&D activities, specifically in better resource consumption management during testing process. “The company optimized its integrated product development process to effectively develop new smart devices and analytics for consumers and industry”.

Contact reporter Ding Yi (yiding@caixin.com)

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