Xiaomi is selling more electric vehicles, but its much larger smartphone business is moving in the opposite direction.
The Chinese electronics maker reported revenue of RMB 108.9 billion (USD 16.2 billion) for the second quarter of 2026, down 6.1% year-on-year (YoY). Adjusted net profit fell 42.6% to RMB 6.2 billion (USD 920 million), while reported profit declined 20.3% to RMB 9.5 billion (USD 1.4 billion).
At the center of the decline was Xiaomi’s smartphone business. Revenue from the segment fell 7.5% to RMB 42.1 billion (USD 6.2 billion), as shipments dropped 26.5% to 31.2 million units.
Xiaomi attributed the decline partly to adjustments in its product portfolio, which reduced shipments of midrange and lower-end models. It also pointed to weaker global demand as prices of key components, particularly memory, continued to rise.
The pressure was also visible in margins. Gross margin for Xiaomi’s smartphone business narrowed to 8.5% from 11.5% a year earlier, even as its average selling price rose 25.9% to a record RMB 1,351 (USD 200.5) per handset.
