Xiaomi Sets Sights on 110 Million Phones, Betting on Cheaper Chips to Reverse Market Share Losses
Published on 07/25/2026 at 22:11 | Redaktion boerse-global.de
Xiaomi has raised its smartphone sales target for the full year 2026 to 110 million units, up from an earlier goal of 90 million, the Chinese electronics group announced this week. The move comes at a time when the company is grappling with a steep profit decline and shrinking market share in key regions, making the upward revision a bold bet on easing component costs.
The rationale behind the target hike is straightforward: management expects prices for memory chips, including DRAM and NAND, to stabilize after a period of acute pressure. By pushing entry-level models more aggressively, Xiaomi hopes to claw back ground lost to rivals through a volume-driven strategy. The company is essentially wagering that a normalization in the supply chain will allow it to regain pricing power in the budget segment, where it has traditionally been strongest.
First-Quarter Earnings Tell a Grimmer Story
The optimism for the full year stands in sharp contrast to the numbers Xiaomi posted for the first quarter of 2026. Revenue fell 10.9 percent to 99.1 billion yuan, while net profit tumbled 57 percent to 4.72 billion yuan. Adjusted net profit, stripping out one-off items, came in at 6.07 billion yuan — still a marked decline from the prior year. The primary culprits were soaring costs for memory components and heavy spending on the company’s electric-vehicle division, which continues to drain margins.
The pain is visible in the smartphone market itself. Preliminary data for the second quarter of 2026 show a double-digit drop in Xiaomi’s global shipments. The company now holds a 12 percent share of the worldwide market, placing it third behind Samsung at 24 percent and Apple at 20 percent. At home in China, the situation is even more precarious: IDC data puts Xiaomi’s domestic market share at just 12.4 percent in the second quarter, sliding to fifth place. Huawei dominates with 22.6 percent, followed by Apple at 18.1 percent.
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Against that backdrop, the target of 110 million units looks ambitious. It signals that management is willing to prioritize volume over margins in the near term, betting that cheaper handsets can win back customers once chip prices ease.
Buybacks Continue as Shares Stabilize
While the operating environment remains challenging, Xiaomi has not paused its share buyback program. On Friday, the company repurchased 1.9 million Class B shares for roughly 50 million Hong Kong dollars. That followed a similar transaction on Wednesday, when it bought 1.875 million shares at prices between 26.60 and 26.76 Hong Kong dollars, costing just under 50 million Hong Kong dollars. In mid-July, Xiaomi had already spent 100.7 million Hong Kong dollars on 3.9 million shares. The steady pace of buybacks suggests the board views the current price range as attractive, even as the company navigates a difficult operational stretch.
The stock has shown signs of stabilization recently. It closed Friday at 3.00 euros, a modest 0.17 percent gain on the day. Over the past 30 days, the share price has risen 16.82 percent, recovering somewhat from its lows. Still, the year-to-date decline stands at 30.80 percent, and the stock remains 20.51 percent below its 200-day moving average — a reminder that the longer-term downtrend has not yet been broken.
Product Launches and AI Investments in the Pipeline
On the product front, Xiaomi is preparing for the global rollout of the Redmi Note 17 series, with certifications in Thailand and Taiwan hinting at an imminent launch. The new lineup is expected to feature larger battery capacities and microSD expansion of up to 2 terabytes. The company also pushed out a security update covering 58 device models across its Xiaomi, Redmi, and POCO brands, including the flagship Xiaomi 14 Ultra and the new 17T series.
In artificial intelligence, Xiaomi’s MiMo-V2-Pro language model, built on a one-trillion-parameter architecture, ranked fifth in the Text-Arena benchmark for the most capable language models. The company is backing that effort with significant capital: in late June, it announced a 7.4-billion-euro investment in research and development across Europe from 2026 to 2028. Xiaomi will also make its first official appearance at IFA in Berlin this September, where it plans to showcase its “Human x Car x Home” ecosystem.
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Analysts Split as Key Earnings Date Approaches
The outlook for Xiaomi’s stock remains a matter of debate. At Smartkarma, analyst Henry Soediarko struck a cautious note on Thursday, pointing to elevated capital expenditure in electric vehicles and AI as a drag on profitability. His colleague Ming Lu, however, took a bullish stance, arguing that a recovery in the smartphone sector could lift the shares based on a five-year price-to-earnings analysis.
The next major test for Xiaomi’s narrative comes on August 18, when the company releases its first-half results for 2026. A full second-quarter report will follow on August 26. Those numbers will reveal whether the anticipated stabilization in memory-chip prices is actually translating into better margins — and whether Xiaomi’s ambitious target of 110 million phones is grounded in reality or wishful thinking.
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