Xiaomi's Margin Squeeze Intensifies as Third Price Hike of 2026 Hits Chinese Smartphone Lineup
Published on 08/02/2026 at 12:32 | Redaktion boerse-global.de
Xiaomi has again raised prices across its premium smartphone portfolio in China, marking the third such adjustment this year as soaring memory-chip costs continue to erode profitability across the industry. The increases, effective immediately, apply to the flagship Xiaomi 17 series alongside the Redmi Turbo 5 and Redmi K90 lines, with markups ranging from roughly 300 to 500 yuan depending on the configuration.
The Xiaomi 17 Pro Max now carries a price tag of 6,499 yuan, up from 5,999 yuan, while the base Xiaomi 17 model climbs from 4,499 to 4,799 yuan. For the more budget-oriented Redmi devices, the increases are comparatively modest at around 300 yuan, though percentage-wise they bite harder: the Turbo 5 sees an uplift of approximately 13 percent from its original price, whereas the higher-end K90 Pro Max rises by only about 7 percent. Reports suggest the cumulative increases across the portfolio could reach up to 13 percent.
Redmi president Lu Weibing has been blunt about the underlying cause, describing the current memory-market conditions as the industry's most severe crisis in a decade. According to Lu, memory prices have nearly quadrupled compared with the first quarter of 2025 — for a configuration with 12 gigabytes of RAM and 512 gigabytes of storage, the chip component alone now costs roughly 1,500 yuan more than it previously did. Market researcher TrendForce quantified the broader trend: DRAM prices climbed 18 percent in the second quarter, while NAND flash rose 15 percent. Samsung, for its part, has warned that the RAM shortage could intensify through 2027 and persist into 2028, and the ripple effects are already visible well beyond Xiaomi — Apple, Nvidia, and Samsung itself have all adjusted pricing, while OPPO, OnePlus, vivo, and Honor have followed suit in China.
Xiaomi has also been forced to pass on costs internationally. In India, the company raised prices on five models in late July by between 500 and 5,000 rupees, and further industry-wide increases are expected there in August, with Samsung, OPPO, Realme, and Nothing reportedly planning similar moves. Earlier, Xiaomi had already lifted prices on the Redmi Note series by 20 to 30 US dollars across India, Southeast Asia, and Latin America, and added 15 US dollars to the 14T model in Europe. A leaked specification for the upcoming Redmi Note 17, slated for an August 6 launch in India, points to a significant price jump over its predecessor as well.
Should investors sell immediately? Or is it worth buying Xiaomi?
The cost pressure is set to show up clearly in the company's next earnings report, due August 26. Analysts anticipate second-quarter revenue of 12 to 13 billion US dollars, with net profit falling roughly 8 percent to around 520 million US dollars. Gross margin is projected to slip from 18.3 percent to between 16.5 and 17 percent — a direct consequence of the pricier components.
Yet even as the smartphone side of the business contends with rising input costs, Xiaomi appears to be pursuing more aggressive volume targets. An unconfirmed report suggests the company wants to lift its 2026 smartphone shipment goal from 90 million to 110 million units, a 22 percent increase, with the rationale being a stabilization in memory-chip prices after earlier declines and a strategic focus on entry-level and mid-range devices in growth markets such as Asia and Latin America. Xiaomi has not officially confirmed the figure, and the optics of chasing higher volumes while component costs climb are admittedly contradictory — a tension that will keep margin development under close scrutiny for the rest of the year.
EVs: A Second Growth Engine With Its Own Pressures
Beyond the handset business, Xiaomi's automotive division continues to expand. The company has opened pre-orders for its two new range-extender SUVs, the SkyNomad N70 Max and N90 Max, built on the Kunlun platform. The N70 Max starts at 259,900 yuan, while the seven-seat N90 Max is priced from 299,900 yuan. Both offer an electric-only range of roughly 500 kilometers and a combined range of up to 1,705 kilometers with the petrol generator engaged. Deliveries are scheduled to begin in September, with a European launch penciled in for 2027. Analyst Chen Jing argues that integration with Xiaomi's smartphone and IoT ecosystem gives the company a competitive edge over rivals such as BYD, Li Auto, and Zeekr.
The first half of 2026 saw Xiaomi deliver 185,055 electric vehicles, up 17.2 percent year on year. That leaves the full-year target of 550,000 vehicles looking ambitious — according to Digitimes calculations, the company still needs to deliver roughly 370,000 more cars to hit the goal, all while competition from Huawei intensifies. CEO Lei Jun, meanwhile, has dismissed speculation about a US market entry, suggesting a YU7 Max spotted in Illinois was likely there for benchmarking purposes, and the company has also denied rumors of a joint venture with Ford.
Stock Swings Reflect the Mixed Picture
Investors have been grappling with the competing narratives of growth potential and cost headwinds. On Friday, Xiaomi's shares closed at 3.23 euros, down 5.00 percent on the day. The monthly picture tells a different story, however: the stock is still up 30.69 percent over the past 30 days, reflecting an earlier recovery from very depressed levels. The gap to the 200-day moving average remains negative at minus 13.27 percent, suggesting the broader trend has yet to turn decisively.
Xiaomi at a turning point? This analysis reveals what investors need to know now.
With first-quarter 2026 revenue of 99.1 billion yuan and research spending up 33.4 percent to 9 billion yuan, the core business is generating solid numbers. The auto segment contributed 19.9 billion yuan in revenue, up 6.9 percent, on more than 80,000 vehicles delivered. Cash reserves exceed 220 billion yuan, providing ample runway for the ongoing EV push.
The fundamental question for shareholders is whether Xiaomi can offset the memory-chip shock through price increases and automotive scale effects without jeopardizing its own growth ambitions. The August 26 earnings release will offer the first hard data on how that equation is playing out.
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