Thunder Army issued a warning.

CEO Lei Jun said that phone prices could rise sharply next year. Photo: Bloomberg .

At the product launch event on May 21st, Xiaomi's CEO issued a blunt warning to consumers. "If you plan to upgrade your phone next year, do it as soon as possible," Lei said. This is a rare instance of a CEO publicly advising consumers to buy a product just before its price increases.

This statement wasn't made on a whim. The Xiaomi 17 Max, the latest product launched at the event, starts at 4,799 RMB (approximately $706 ), 300 RMB higher than the standard Xiaomi 17. It comes in four configurations: 12GB and 16GB of RAM, with 256GB or 512GB of internal storage.

It's not just Lei Jun; other senior Xiaomi executives have also been signaling the company's difficulties. Lu Weibing, President of the Redmi brand, frankly admitted that the starting price of 2,999 yuan ( US$440 ) for the REDMI K90 Max is causing the company significant losses. He predicted that from the second half of this year, some high-end domestic smartphones in China will surpass the 10,000 yuan (approximately US$1,470 ) mark.

Under that pressure, Xiaomi adjusted the prices of many phone models. On April 3rd, the company increased the price of the REDMI K90 Pro Max by 200 RMB ( US$30 ) and canceled promotions for the Turbo 5 and Turbo 5 Max.

Conversely, Xiaomi also reduced the prices of many models launched last year. On May 14th, Xiaomi announced that the 15 Ultra model was reduced by 1,500 RMB ( US$220 ), while the REDMI K90 Pro Max and Xiaomi 17 models were each reduced by 520 RMB ( US$77 ).

Many Xiaomi smartphone models have seen significant price increases. Photo: Cnet .

Experts call this a two-pronged strategy. The company is liquidating old stock through promotions while maintaining high prices for new products, accurately reflecting the escalating cost of components. CEO Lei Jun affirmed that Xiaomi will strive to minimize the impact of memory costs on consumers through improved internal efficiency. However, he also acknowledged that price adjustments are unavoidable in the current context.

In the long term, he emphasized the role of technology investment. The Xiaomi CEO identified chips, operating systems, and AI as three core technologies that guide its strategy.

"Six years ago, we planned to invest 100 billion yuan ( US$14.7 billion ) over five years. Now, we have achieved breakthroughs in many areas such as automobiles, chips, large-scale AI modeling, and robotics," Lei said.