SHANGHAI, Aug 19 Reuters Chinese smartphone maker Xiaomi Corp posted a steep drop in second quarter revenue on Friday as the world39;s biggest smartphone market shrank, hit by strict COVID restrictions.

Sales fell 20 year on year to 70.17 billion yuan 10.31 billion, missing estimates and marking a steeper decline from the previous quarter, when the company posted its firstever revenue drop since listing.

Net income fell 67 to 2.08 billion yuan, missing analysts39; estimates.

China39;s consumer consumption has struggled to rebound from the impact of lockdowns in Shanghai and other cities in the first half of the year.

Data this week showed China39;s economy slowed unexpectedly in July, indicating the world39;s second largest economy is struggling to shake off the June quarter39;s hit to growth from COVID restrictions and prompting a central bank rate cut.

China39;s longstagnant smartphone sector has been especially hit by the downturn, with unit shipments down 10 year on year in the second quarter, according to research firm Canalys.

Smartphone sales for Xiaomi, which generate more than half of the company39;s total revenue, fell 29.

In 2021, Xiaomi saw a sales surge after it grabbed market share from rival Huawei Technologies Co Ltd HWT.UL, whose ability to proscure components was heavily cripled by U.S. sanctions.

Yet the bump was shortlived, and the company39;s stock price has tumbled nearly 40 since the start of 2022, hit by the slowing Chinese economy and…