❯ Xiaomi Q2 Revenue Down 6.1% YoY; Storage Price Hikes Drag Handset Shipments Down 26.5%

EARNINGSXiaomi’s Q2 revenue came in at RMB 108.9 billion (about $16.2 billion), down 6.1% year over year; net profit was RMB 9.5 billion, down 20.3%; adjusted net profit was RMB 6.2 billion, a decline of 42.6%. Revenue and profit still beat market expectations, but the direction of the decline is beyond dispute.

STORAGE HURDLEAccording to Bloomberg, the main culprit is memory chip shortages and price increases. Over the past year, DRAM and flash prices have kept pushing up total device bill-of-materials costs, forcing manufacturers to raise prices, with entry-level and mid-range models hit hardest. Xiaomi’s response has been to actively cut low-end volume: handset shipments are down 26.5% year over year to 31.2 million units, but thanks to price increases and an upward mix shift, phone revenue fell only 7.5%. In other words, what was given up is volume; what was kept is per-unit price.

AI & EVThe businesses trending upward in the report are electric vehicles and AI-related operations, partially offsetting the pressure on the handset side. Teams building on-device AI now need to recompute the cost curve for local memory — on-device models consume precisely the memory chips data centers have been snapping up, and this round of price hikes has turned the “AI phone” materials math back into a problem that demands serious attention.

▪ SIGNALData centers bid memory prices up, and the final bill lands on entry-level phone users.