According to reports from Hong Kong and Chinese media, the cost of mobile phone memory has risen sharply. Xiaomi Group President Lu Weibing said in a conference call that the industry consumes lower-priced inventory and may have to raise prices in 2...
According to reports from Hong Kong and Chinese media, the cost of mobile phone memory has risen sharply. Xiaomi Group President Lu Weibing said in a conference call that the industry consumes lower-priced inventory and may have to raise prices in 2026 to cope with it, and product retail prices may rise significantly.
Lu Weibing also revealed that Xiaomi Motors is scheduled to complete the full-year delivery target of 350,000 vehicles this week. The current vehicle gross profit margin and average selling price (ASP) are performing well. It is believed that the performance in the fourth quarter will remain stable. However, it is predicted that next year will be very challenging and Xiaomi Motors' gross profit margin may decline.
Lu Weibing pointed out that this memory cost increase is a long-term one, mainly due to the surge in demand for high-bandwidth memory (HBM) caused by artificial intelligence (AI); however, Xiaomi has signed a supply agreement with its partners for next year and is confident in ensuring the supply of raw materials. Lu Weibing emphasized that Xiaomi and its friends will try their best to control the increase in product prices, which is expected to be much less than the increase in memory prices. In addition, in the short term, they will upgrade the product structure and increase ASP to share the pressure of rising costs. He emphasized that Xiaomi is not just a mobile phone company, but other businesses can also help share the pressure.
Lu Weibing admitted that the pressure in the second half of the year was greater than that in the first half. In terms of mobile phone business, memory costs increased significantly, "state subsidies" retreated in the second half compared with the first half, and competition became more intense. However, the high-end strategy has achieved results. This quarter, China's smartphones priced at 4,000~6,000 yuan accounted for 18.9% of the market, an increase of 5.6 percentage points year-on-year; Xiaomi 17 Pro is priced from 5,999 yuan On "Double Eleven", Max became the sales and sales champion of domestic mobile phones priced above RMB 6,000. It is the only product that can compete with the iPhone.
In addition, Xiaomi Group’s third quarter financial report data shows that Xiaomi’s innovative businesses such as smart electric vehicles and AI achieved positive operating income in a single quarter for the first time, with a gross profit margin of 25.5%. Lu Weibing revealed that Xiaomi Motors remained basically stable in the fourth quarter of this year, but next year will be very challenging, and Xiaomi Motors' gross profit margin may decline compared to this year. On the one hand, next year, car manufacturers will face the impact of the purchase tax subsidy policy of halving. There are many players in the automotive industry, and the industry is very early in development. It will take a period of fierce competition to converge. Xiaomi Motors must adapt to changes in the industry.
Further reading: Xiaomi’s Q3 adjusted profit increased by 81% year-on-year; electric vehicle made profit for the first time Xiaomi faces triple crisis, plunges 30% after challenging 200 billion market value
