Xiaomi’s smartphone sales dipped in Q3 2025, as ASP declined in overseas markets, with the China-based vendor warning the rising cost of memory will lead to higher prices and impact margins on consumer devices.

On an earnings call, Xiaomi CFO Lu Weibing forecast cost pressures would increase in 2026 on smartphones, tablets and notebooks.

He added higher costs are part of a longer cycle spurred by increased demand for high bandwidth memory, with the company planning to “mitigate the hike by increasing product prices and optimising product structures”.

Smartphone revenue slipped 3.2 per cent year-on-year to CNY46 billion ($6.5 billion), with shipments mostly flat at 43.3 million units.

Overall smartphone ASP dropped 3.6 per cent to CNY1,063, but the figure increased in the domestic market due a higher contribution from premium devices.

Net profit in the period surged 130 per cent to CNY12.3 billion, with total revenue increasing 22.3 per cent to CNY113.1 billion.

The company’s IoT and lifestyle products business increased 5.6 per cent to CNY27.6 billion; internet service revenue grew 10.8 per cent to CNY9.4 billion.

Its EV business achieved positive quarterly income from operations for the first time, with revenue tripling to CNY29 billion.

R&D spending in the quarter rose 52.1 per cent to CNY9.1 billion, with the full-year outlay forecast to hit CNY30 billion, a 20 per cent increase. Capex in the first three quarters increased 87 per cent to CNY13 billion.