Xiaomi Corporation has shattered its own financial records, reporting a 2025 revenue of 457.3 billion RMB (approximately $63 billion), marking a 25% year-on-year increase. While the headline figures suggest a company at the height of its powers, a closer look at the balance sheet reveals a structural pivot. The company’s traditional core—smartphones—is currently being battered by a global surge in memory chip prices, driven by the insatiable demand from the artificial intelligence server market.
President Lu Weibing has issued a rare, candid warning to consumers: the era of hyper-affordable hardware may be over. In the final quarter of 2025, Xiaomi’s smartphone gross profit margins plummeted to 8.3%, a sharp decline from the 12.6% seen just a year prior. As memory costs rise more aggressively than predicted, Lu signaled that retail price hikes are "inevitable," asking for consumer understanding as the company navigates a cost cycle expected to last through 2027.
However, the potential crisis in mobile hardware is being offset by the meteoric rise of Xiaomi’s automotive division. In only its second year of sales, Xiaomi’s EV business generated over 103 billion RMB in revenue and, remarkably, achieved operational profitability—a feat that has eluded many Western and Chinese EV startups for a decade. With 410,000 units delivered in 2025 and a target of 550,000 for 2026, the company’s SU7 and YU7 models have effectively established a "second growth curve."
Looking ahead, Xiaomi is doubling down on its "Human x Car x Home" ecosystem with a massive R&D commitment. The company plans to spend over 200 billion RMB on research over the next five years, focusing heavily on AI-driven agents and humanoid robotics. By integrating its proprietary MiMo large language models into everything from smartphones to EVs and eventually deploying robots in its own factories, Xiaomi is attempting to transcend its identity as a gadget maker to become a holistic AI infrastructure provider.