Xiaomi's Two-Speed Engine: Handset Slide Deepens Even as the EV Lineup Accelerates
Published on 08/09/2026 at 07:21 | Redaktion boerse-global.de
The smartphone market's contraction this spring has exposed a widening fault line inside Xiaomi's business model. While the company's electric-vehicle division churns out new models and record deliveries, its legacy handset operation — long the profit engine — is bleeding market share at a faster clip than any of its major rivals.
Industry tracker Omdia puts global smartphone shipments for the second quarter of 2026 at 272 million units, down 6 percent year on year. Xiaomi's own deliveries fell 26 percent to 31.2 million devices, the steepest decline among the top-tier manufacturers. Samsung, by contrast, shipped 60.5 million handsets, a 5 percent improvement that gives it a 22 percent share of the worldwide market. Apple was the standout performer, boosting volumes 23 percent to 55.1 million units and capturing 20 percent of global sales. Fellow Chinese players OPPO — counted together with realme and OnePlus — and vivo also lost ground, but their respective declines of 17 percent and 18 percent look almost benign next to Xiaomi's slide.
That divergence is now visible in the share price, albeit with some recent stabilisation. The stock closed last Friday at EUR 3.04, up 2.13 percent on the day, but the longer-term picture remains ugly: the equity is down 29.83 percent since the start of the year and sits 53.57 percent below its 52-week high of EUR 6.54, reached in late September 2025. A brief rally did follow founder Lei Jun's July 27 unveiling of two new SUVs — the stock jumped 7.47 percent to EUR 3.22 that day — but the momentum faded quickly.
The new vehicles, branded under the SkyNomad sub-line rather than the existing YU7 family, mark a deliberate push into fresh segments. The seven-seat SkyNomad N90 Max and five-seat SkyNomad N70 Max are designed to broaden Xiaomi's automotive appeal beyond its current model range. The expansion comes at a cost, though. First-quarter vehicle deliveries hit 80,856 units, up 6.6 percent, generating segment revenue of 19.86 billion yuan, but the car business still posted an operating loss of 3.1 billion yuan. Sunday's regulatory filings in China added further colour to the product pipeline: among six newly registered models was a revised YU7 variant with a 73-kilowatt-hour battery and a CLTC-rated range of 643 kilometres, alongside entries from Ideal, Avatr, Voyah, Zunjie and Xpeng — a reminder of just how crowded China's EV market has become.
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The financial strain is most evident in the first-quarter numbers. Revenue came in at 99.142 billion yuan, down 10.9 percent from a year earlier, while adjusted net profit tumbled 43.1 percent to 6.07 billion yuan. On a GAAP basis, net income fell even harder, dropping 57 percent to 4.72 billion yuan. The smartphone and AIoT segment saw revenue decline 14.5 percent to 79.3 billion yuan, with handset shipments off 19.2 percent. Xiaomi's smartphone-only revenue fell 12.5 percent to 44.273 billion yuan. Yet the company continues to invest through the downturn: research and development spending rose 33.4 percent to 9 billion yuan, underscoring a commitment to artificial intelligence and other future growth areas. The IoT ecosystem, meanwhile, kept expanding, with connected devices on the platform reaching 1.119 billion.
Management is also looking to vertical integration as a margin remedy. Lei Jun signalled back in January that the company would assemble its own chips, operating system and AI systems this year, aiming to reduce reliance on Qualcomm and Google. That strategy gained an additional dimension in late July when CXMT, a Chinese memory-chip maker in which Xiaomi holds an investment, made its stock-market debut — a reminder that the company is positioning itself across China's semiconductor supply chain, not just through in-house development.
Supporting the share price has required direct intervention. In January, Xiaomi set up an automated buyback programme worth HK$2.5 billion (roughly EUR 295 million), run through an independent broker. The scheme, which began on January 23 and carries an exemption from the Hong Kong exchange, runs until the 2026 annual general meeting or until the allocated sum is exhausted.
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On the product front, the Redmi sub-brand used its ChinaJoy 2026 appearance in Shanghai at the end of July to tease a major launch in the Snapdragon pavilion — likely a handset from the K100 series featuring a 185-Hz OLED display and an 8,500 mAh battery. Xiaomi also pushed out a security update for nine smartphones and tablets on Thursday, though the specifics have not been disclosed. No analyst rating changes or price-target revisions have surfaced in the past fortnight.
For investors, the picture is one of two businesses moving in opposite directions. The handset division — the foundation on which Xiaomi was built — is losing ground in both its home market and key export regions, while the automotive arm, though still loss-making, is gaining operational traction and broadening its model lineup. How those forces net out will only become clear with the next quarterly report.
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