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Earnings · Memory Costs · Smartphones · Xiaomi
Chinese smartphone and electronics maker Xiaomi Corporation reported a 27% slump in quarterly net profit to 6.54 billion yuan ($950.5 million), primarily driven by soaring memory-chip prices and subdued consumer demand in one of the world's largest consumer markets.
This performance underscores significant headwinds across Xiaomi's businesses, with shares under pressure over the past six months due to the challenging environment. The global memory-supply shortage, fueled by the AI boom, increased component costs, directly impacting Xiaomi's smartphone profit margins, which declined to 8.3% from 12.0% a year earlier.
Demand for smart home products also flagged, with revenue dropping 20% to 24.60 billion yuan, attributed to trade-in subsidy fatigue and intense competition, as reported by Dow Jones. Analysts at Citi predict Xiaomi's smartphone shipments will decline 13% this year, while HSBC estimates a 10% drop in 2026 sales volume.
Despite these challenges, the company's electric-vehicle (EV) business emerged as a bright spot, with quarterly revenue more than doubling to 36.3 billion yuan, driven by stronger vehicle deliveries and selling prices. For the full year, Xiaomi's net profit increased 76% to 41.57 billion yuan, and revenue climbed 25% to a record 457.29 billion yuan, supported by growth across its smartphone, IoT, and EV segments.
Xiaomi Profit Plunges 27% on Soaring Chip Costs(current)
