Xiaomi executive teases Q4 market domination

Xiaomi just posted another record quarter, with total revenue hitting $16.1 billion—a hefty 30.5% jump compared to last year. CEO Lu Weibing sounded confident about the outlook, forecasting that smartphone gross profit margins will rebound by the fourth quarter. Margin pressure is real right now, mostly thanks to rising component costs, but Xiaomi isn’t hitting the brakes on investment. R&D spend surged 41.2% to $1.08 billion. And yes, they’re still targeting that 200 million smartphone shipment milestone within the next three to five years. The company’s broad ecosystem—spanning mobile, smart home, and automotive—is showing some serious momentum.

All Segments Deliver Record Revenue

On the smartphone front, Xiaomi kept its global third-place position, shipping 42.4 million units for a 14.7% market share. Gross margins did slip to 11.5% quarter-over-quarter, largely due to surging memory prices and continued supply chain disruptions. Fewer new device launches compared to rivals also played a role in the temporary margin squeeze.

Lu Weibing credited the decline mainly to unexpected hikes in memory costs (LPDDR4X, specifically) and new export controls impacting key materials like steel and metals since early 2025. Still, the company’s long-term view remains optimistic.

Smart Home Business Posts Impressive Growth

The AIoT division came in strong with $5.37 billion in revenue, up 44.7% year-over-year. Smart home appliances were the star performers, posting 66.2% growth, driven by robust air conditioner sales—over 5.4 million units shipped. Xiaomi outperformed the market here, achieving both higher volumes and increased average selling prices (up $28 per unit). Refrigerators and washing machines saw healthy growth, too—up 25% and 45%, respectively.

Automotive Segment Making Strides

Xiaomi’s automotive division is starting to look like a real contender, bringing in $2.86 billion in revenue with a solid 26.4% gross margin. The company delivered 130,200 electric vehicles at an average price of $35,200. Cumulative deliveries are now over 300,000 since launch. Operating losses are narrowing quickly, dropping to $42 million this quarter. Plans are in motion for a European market launch by 2027, and brand recognition is reportedly above 95% in key regions.

Focused Investment in AI and Chips

A significant share of Xiaomi’s R&D—about 25%—went to AI initiatives in Q2 2025. The company is doubling down on self-developed chips and operating systems, viewing these as essential to long-term competitiveness. Continued investment here is seen as a strategic move to insulate against supply chain risks and maintain a technology edge.

Source: ITHome

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