Xiaomi Concerned Memory Cost Will Result in Device Price Growth

Xiaomi’s smartphone sales dropped in the third quarter of 2025, as ASP declined in overseas markets. The Chinese vendor warned that the rising cost of memory will lead to higher prices and impact margins on consumer devices.

On an earnings call, Xiaomi CFO Lu Weibing forecast that cost pressures would increase in 2026 on smartphones, tablets, and notebooks. He added that higher costs are part of a longer cycle spurred by increased demand for high-bandwidth memory, with the company planning to mitigate the hike by increasing product prices and optimising product structures.

Smartphone revenue slipped 3.2% to CNY46 billion ($6.5 billion), with shipments mostly flat at 43.3 million units. Overall smartphone ASP dropped 3.6% to CNY1,063, but the figure increased in the domestic market due to a higher contribution from premium devices. Net profit in the period surged 130% to CNY12.3 billion, with total revenue increasing 22.3% to CNY113.1 billion.

The company’s IoT and lifestyle products business increased 5.6% to CNY27.6 billion, as internet service revenue grew 10.8% to CNY9.4 billion. Its EV business achieved positive quarterly income from operations for the first time, with revenue tripling to CNY29 billion. R&D spending in the quarter rose 52.1% to CNY9.1 billion, with the full-year outlay forecast to hit CNY30 billion, a 20% increase. Capex in the first three quarters increased 87% to CNY13 billion.