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Xiaomi says it will raise product prices amid rising memory chip costs. Photo: Reuters . |
Amid soaring global memory chip costs, Xiaomi has finally announced it will adjust its phone list prices. On April 3rd, Xiaomi stated that it will adjust the suggested retail prices of some products starting April 11th in the Chinese market.
Accordingly, this price adjustment applies to three models: the REDMI K90 Pro Max (with a price increase of 200 RMB), while the Turbo 5 and Turbo 5 Max will have their accompanying promotions canceled. The 512GB version, however, will continue to receive price support.
Xiaomi is known for its differentiated pricing strategy. Now, they are having to go against this philosophy. This change was foreshadowed in their 2025 earnings report on March 24th. The company stated that pressure on the smartphone segment has begun to become apparent. The gross profit margin for mobile phones decreased from 12.6% in 2024 to 10.9% for the whole year, and even dropped to just 8.3% in the fourth quarter.
At the press conference, company leaders told the 21st Century Business Herald that the price increase for memory chips was stronger than initially anticipated. “We’re just holding out a little longer than other companies, but the upward price trend is inevitable,” Xiaomi’s leaders responded during the meeting.
Previously, brands like Oppo and Vivo had adjusted prices from mid to late March. They also acknowledged the immense pressure they are currently facing. The companies stated they would try to hold out longer and hoped for user understanding regarding the price increase.
According to QQ News , the increase in memory costs is affecting Xiaomi's product groups unevenly. Smartphones, tablets, and laptops are most heavily impacted, followed by electric vehicles.
Meanwhile, the company's IoT segment is projected to grow significantly by 2025, with revenue exceeding 120 billion RMB for the first time and a record-high gross profit margin of 23.1%. Revenue from electric vehicles and new business segments also exceeded 100 billion RMB. Simultaneously, they recorded positive operating profit for the entire year for the first time.
This diversified business structure helps Xiaomi partially distribute cost pressures from its mobile device division to other departments. In addition, the scale of its supply chain also plays a supporting role.
The company's leaders revealed they have signed long-term supply agreements with the world's five largest memory manufacturers, giving them a significant advantage in terms of supply sourcing and pricing. Based on prior forecasts, Xiaomi had already stockpiled a large amount of inventory.
However, industry experts believe the current surge in memory prices is unprecedentedly prolonged. The cost of this component accounts for a large proportion of a device's total Bill of Materials (BOM). As prices rise, budget-friendly devices are more heavily impacted than high-end models.
Zhang Huiyuan, Director of Enterprise Ratings for Asia Pacific at Fitch Ratings, predicts that memory chip prices will remain high during 2026-2027. Data from Counterpoint Research shows that smartphone sales in China decreased by 4% year-on-year in the first two months of this year.
Source: https://znews.vn/xiaomi-khong-cam-cu-noi-post1640505.html
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