Xiaomi shares fall 5% as third price hike hits flagship lineup

Xiaomi-W (01810.HK) fell 5.21% to HKD27.28 after the company raised smartphone prices for the third time this year, extending hikes from entry-level models to its flagship lineup.

"The price of some domestic bar-type flagship smartphones is likely to exceed 10,000 yuan by the end of the year," Lu Weibing, president of Xiaomi, said during a May livestream, adding that surging memory prices have placed enormous pressure on pricing across the industry. He projected the storage-chip shortage would persist at least until the end of 2027, or through 2028.

The latest round lifts the Xiaomi 17 Pro Max by RMB500 to RMB6,499, the Xiaomi 17 Pro by RMB400 to RMB5,399, and the Redmi Turbo 5 by RMB300 to RMB2,599, according to updated prices on Xiaomi Store. Mid-range models across the K90 series rose a uniform RMB300. Memory prices have nearly quadrupled versus the first quarter of 2025, with a 12GB-plus-512GB configuration now costing roughly RMB1,500 more in components, Lu said. Samsung has warned the RAM crunch could run through 2027 and into 2028, and Apple, Nvidia, and OPPO have all adjusted pricing.

The hikes land ahead of Xiaomi's second-quarter results on Aug. 26, when investors will gauge whether the memory shock has peaked. Analysts expect revenue of $12 billion to $13 billion with net profit down about 8 percent to roughly $520 million, and gross margin slipping from 18.3 percent to between 16.5 percent and 17 percent. The stock remains 50.35 percent below its 52-week high of €6.51 even after a 30-day rally of 30.69 percent, with annualized volatility of 57.44 percent showing how divided the market is.

Memory costs test volume ambitions

The pricing pressure collides with an unconfirmed report that Xiaomi aims to lift its 2026 smartphone delivery target from 90 million to 110 million units, a 22 percent increase, betting on memory-price stabilization and budget-device demand in Asia and Latin America. Xiaomi has not confirmed the figure, and the logic of chasing volume while component costs climb appears contradictory.

The automotive division offers a counterweight. Xiaomi has opened pre-orders for two range-extender SUVs under its Skynomad sub-brand — the N70 Max at RMB259,900 and the seven-seat N90 Max at RMB299,900 — with deliveries starting in September and a European launch targeted for 2027. The company delivered 185,055 electric vehicles in the first half, up 17.2 percent year over year, though the full-year target of 550,000 remains a stretch. BofA maintained its Buy rating, citing support from the Pengcheng new-vehicle series pricing, while Morgan Stanley is positive on Skynomad sales as a share-price catalyst.

The buyback program — roughly 399.6 million Class B shares for about HK$14.6 billion through May — signals management sees the stock as undervalued. Cash reserves exceed RMB220 billion, funding the EV push. Whether the memory-chip headwind is easing or intensifying will determine if the stock can close the gap to its 52-week high, still more than half its value away.

This article is for informational purposes only and does not constitute investment advice.