Xiaomi’s average smartphone selling price hit an all-time high in the three months to June 2026, and the company’s own results filing is unusually direct about why: memory is expensive, and the cost is landing on buyers. The figures come from Xiaomi Corporation’s results announcement to the Hong Kong stock exchange, published on 18 August.
The average selling price of a Xiaomi phone rose 25.9% year-on-year to RMB1,351.0, up from RMB1,073.2 in the same quarter of 2025. That is a record for the company (roughly $190, by our own conversion at current rates — the filing reports in renminbi). Over the same period Xiaomi shipped 31.2 million phones, down 26.5% from 42.4 million a year earlier.
What Xiaomi says caused it
Xiaomi’s own words in the filing: “In the second quarter of 2026, geopolitical uncertainties persisted, while significant increases in key component costs, including memory, along with intensified industry competition, continued to create headwinds for our business.”
The company frames the price rise as strategy — “premiumization”, an optimised product mix, a deliberate retreat from the cheapest tiers. There is evidence for that: Xiaomi says phones retailing at RMB3,000 or above made up 32.1% of its units sold in mainland China, a record and up 4.5 percentage points.
But the same filing offers a blunter explanation for the shipment collapse. Xiaomi attributes it to “the optimization of our product portfolio and the reduction in shipments of our mid-range and low-end smartphones, as well as the weakened global demand driven by the continued increase in price of key components.” In plain terms: cheap phones got more expensive to build, Xiaomi built fewer of them, and buyers bought fewer phones. It is not only a repositioning; it is also demand walking away from a higher price tag. Xiaomi cites Omdia data showing global smartphone shipments fell 6% year-on-year in the quarter, so this is not a Xiaomi-specific problem.
The profit numbers, and why two different figures are circulating
Coverage of these results has quoted profit declines of both roughly 20% and roughly 43%. Both are correct, because they measure different things, and it is worth separating them:
- Profit for the period (IFRS): RMB9,463.4 million, down 20.3% from RMB11,873.2 million
- Adjusted Net Profit (non-IFRS): RMB6,219.1 million, down 42.6% from RMB10,830.7 million
- Revenue: RMB108,921.6 million, down 6.1%
- Smartphone revenue: RMB42.1 billion, down 7.5%, at a gross margin of 8.5%
Xiaomi remained the world’s third-largest smartphone vendor for a 24th consecutive quarter on Omdia’s numbers, ranking second in Southeast Asia, Latin America and the Middle East.
What this means if you are buying a phone
An 8.5% gross margin on smartphones tells you Xiaomi is not enjoying this. When a manufacturer that built its reputation on aggressive pricing raises its average price by a quarter in twelve months and still watches margin compress, the pressure is upstream of the brand. That aligns with what androidpure covered in the memory chip crunch earlier this month.
Practically, expect the squeeze to show up first at the bottom of the range, where a RAM or storage bill is a larger share of the bill of materials. The pattern to watch is not headline price rises on flagships but quiet ones: a budget phone launching with 6GB where last year’s had 8GB, a 128GB base variant where 256GB used to start the range, or a model simply not being replaced. Xiaomi has told its investors it is “actively adjusting shipment cadence” — that is what that looks like from the shop floor.
Source: Xiaomi Corporation results announcement for the three and six months ended 30 June 2026
