【1810 Performance】Xiaomi Lu Weibing Admits Memory Price Hike Challenges Are Enormous, AI Investment of 16 Billion Yuan This Year; Q4 Revenue Up 7.3% YoY, Adjusted Profit of 6.35 Billion Exceeds Expectations (Second Edition)

Xiaomi (01810) Announces Q4 2025 Results, Revenue of 116.917 billion yuan (RMB), up 7.3% year-on-year, slightly above the forecast of 116.58 billion yuan; Adjusted net profit of 6.349 billion yuan, down 23.7% year-on-year, slightly above the forecast of 6.07 billion yuan.

Lu Weibing: Memory Price Increase Presents Huge Challenges

Market concerns about the impact of rising memory costs on Xiaomi. President Lu Weibing stated at the press conference that memory price hikes are a significant challenge this year. He has previously mentioned that memory price increases are a long-term cycle, but the actual speed and magnitude of the rise are higher than expected. Currently, memory price increases are affecting not only the smartphone industry but the entire consumer electronics sector.

Lu Weibing believes that Xiaomi’s full ecosystem—smartphones, AIoT, automobiles, and internet—contribute evenly. For example, products like large appliances have a lower memory cost proportion, which can effectively offset and respond to memory cost increases. He also mentioned that memory price hikes have a greater impact on low-end phones, but Xiaomi has benefited from a high-end strategy in recent years.

He emphasized that Xiaomi smartphones are important customers for global memory manufacturers, maintaining very good cooperative relationships with upstream partners, with high priority in supply and advantageous pricing. He revealed that in the short term, Xiaomi will mitigate some of the price increase pressures through technological innovation. “If we really can’t hold it anymore, it might be unavoidable for us to consider raising prices.”

As the memory cycle continues, Lu Weibing believes that the consumer electronics industry will undergo a reshaping, with some companies potentially facing operational difficulties, but also presenting opportunities after the challenges.

AI Investment of 16 Billion in 2026

Xiaomi’s R&D investment in 2025 is 33 billion yuan. Lu Weibing said that this year, over 40 billion yuan will be invested, with 16 billion allocated to AI.

Regarding the opportunity of open-source AI platform OpenClaw (Lobster), Lu Weibing believes that Lobster inspires industry thinking about exploring AI Agents (artificial intelligence assistants). Xiaomi smartphones are trying to incorporate Miclaw, which he thinks can be fully integrated with its PaoPao OS and the full ecosystem of vehicles and homes. Besides smartphones, Xiaomi plans to promote coverage across more products, including personal computers, watches, and more.

Xiaomi is actively expanding its products into overseas markets. Lu Weibing stated that this year, the focus will be on increasing the proportion of high-end products to boost ASP, while accelerating the expansion of overseas retail stores.

He also mentioned that last year, Xiaomi’s large appliances covered four key regions across 14 countries and regions. Xiaomi has brought mature integrated installation services from China to overseas markets. “In Hong Kong, there is very strong interest in our large appliances. Our Xiaomi washing machines are in high demand.” This year, Xiaomi will expand its sales channels and product range for large appliances, emphasizing that overseas markets will not engage in price wars.

Reaffirming Xiaomi’s Entry into Europe with Cars in 2027

Xiaomi launched the new generation SU7 electric vehicle. CFO Lin Shiwei said that after the new SU7’s launch, it attracted more new users. Among the first batch of owners, female users exceeded those of the previous generation, and iPhone users account for nearly 60%. In terms of models, the Max version accounts for over 25%, and nearly 60% of buyers opted for paid paint options. Indigo Green is the most popular color. Lin Shiwei also mentioned that Xiaomi’s automotive entry into Europe next year remains on schedule.

Lu Weibing added that Xiaomi is currently building teams, selecting locations, and recruiting partners. “This is truly a great time for Chinese automakers to go global,” he said, believing that Xiaomi can work with other Chinese companies to promote Chinese new energy vehicles worldwide.

Smartphone ASP Declines Again Last Quarter

Xiaomi stated that in Q4 2025, the company faced headwinds such as sharp increases in storage costs and intensified industry competition, but the business remained resilient, with quarterly revenue reaching a record high.

In terms of business segments, Xiaomi’s smartphone revenue last quarter was 44.339 billion yuan, down 13.6% year-on-year, affected by an 11.6% decline in smartphone shipments to 37.7 million units. The ASP (average selling price) of smartphones decreased by 2.2% to 1,176 yuan.

Component price increases impacted Xiaomi’s performance. Last quarter, the gross profit margin of smartphones declined by 3.7 percentage points year-on-year to 8.3%, mainly due to rising prices of core components and increased competition in mainland China. However, higher-margin products from overseas markets helped offset some of the impact.

IoT and lifestyle consumer product revenue decreased by 20.3% year-on-year to 24.597 billion yuan; internet services revenue increased by 5.9% to 9.886 billion yuan.

Electric Vehicle Revenue Surges 122%

Xiaomi’s innovative business revenue was 37.216 billion yuan, up 123.4% year-on-year, with smart electric vehicle revenue increasing by 122% to 36.3 billion yuan, mainly due to increased vehicle deliveries and higher ASP.

Last quarter, Xiaomi delivered 145,115 vehicles, a 108.2% increase year-on-year. The ASP for smart electric vehicles rose by 6.6% to 249,846 yuan, mainly driven by deliveries of the Xiaomi YU7 series. The gross profit margin of the innovative business segment increased by 2.3 percentage points year-on-year to 22.7%.

As of December 31, 2025, Xiaomi had opened 477 car sales stores across 138 cities in mainland China.

New Generation SU7 Launched, 30,000 Units Locked in 3 Days

In March 2026, Xiaomi officially announced the new Xiaomi SU7 series electric vehicles. The standard, Pro, and Max versions start at 219,900 yuan, 249,900 yuan, and 303,900 yuan respectively. The new SU7 was on sale for 34 minutes, with over 15,000 units locked in; after three days, the total locked-in orders exceeded 30,000 units.

For the full year, Xiaomi’s 2025 revenue was 457.287 billion yuan, up 25.0% year-on-year; adjusted profit was 39.166 billion yuan, up 43.8%.

(Second edition includes the press conference)