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StocksMedium•16 April 2026•

1 min read

Xiaomi Pivots to EVs and AI Amid Declining Smartphone Profitability

Key Facts

1Xiaomi's smartphone share of total gross profit declined from 40.9% to 15.1% over the past two years.

2The EV and AI segment's contribution to profit increased from 0% to 34.7%.

Xiaomi is undergoing a major structural transition, shifting its focus toward Electric Vehicles (EVs), robotics, and AI to drive long-term growth. Data reveals that the smartphone segment's share of total gross profit plummeted from 40.9% to 15.1% over the past two years. Conversely, the contribution of the EV and AI segments to total profit surged from 0% to 34.7%, highlighting a successful strategic pivot. Management anticipates that cost pressures in the smartphone business will persist due to a significant spike in memory prices. This diversification strategy aims to mitigate risks associated with thinning margins in traditional hardware. While the long-term outlook remains promising, heavy R&D spending and component costs may weigh on near-term earnings.