Xiaomi Pushes Premium TVs in India as Budget Smartphone Margins Get Crushed
05.06.2026 - 12:32:11 | boerse-global.de
The Chinese tech giant is fighting a battle on two fronts: rolling out higher-margin consumer electronics while its core smartphone business hemorrhages profitability. Xiaomi will launch its FX Mini LED TV series in India on June 11, a move designed to bolster its AIoT ecosystem and improve segment margins. Yet that narrative is being drowned out by a brutal earnings report that shows adjusted net profit tumbling 43% year-on-year to 6.1 billion renminbi, as rising memory chip costs eviscerate the low-end handset business.
The profit squeeze is most acute in the entry-level smartphone segment, where selling prices below $100 have become a liability. New market data for the first quarter of 2026 reveals a 41% plunge in shipments of sub-$100 devices across the Middle East and Africa, a region where Xiaomi’s market share has slipped from 14% to 11%. The culprit is a supply-side crunch in DRAM and NAND storage that has pushed component costs higher, and Xiaomi, as a volume-driven manufacturer, has little room to pass those costs on to price-sensitive consumers.
That regional weakness is reflected in the broader smartphone business. Gross margins on handsets fell to 10.1%, and total smartphone shipments dropped to 33.8 million units in the first quarter. Management points to softer global demand and a deliberate portfolio cleanup at the lower end, with average selling prices rising to 1,310.1 yuan — a sign of a calculated shift upmarket. Still, the damage to profitability is stark.
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The IoT and lifestyle segment offers a more encouraging counterpoint. Revenue from this division reached 24.7 billion yuan in the first quarter, with record overseas sales driven by wider distribution and expanded product categories. Gross margin in the segment climbed to 25.2%, up 5.1 percentage points from the prior quarter. Xiaomi’s AIoT platform now connects roughly 1.12 billion devices, excluding smartphones, tablets and laptops, and nearly 24 million users operate five or more linked devices. The new FX Mini LED line — available in 43-, 55-, 65- and 75-inch sizes, priced between 32,999 and 84,999 rupees (with launch discounts from 29,999 rupees) — is the latest attempt to extend that ecosystem further into premium home entertainment.
But the broader business remains under heavy pressure. Xiaomi’s nascent electric vehicle and AI segment generated billions in revenue but posted an operating loss of 3.1 billion renminbi, weighed down by subsidies and costly components. The company is effectively subsidising its future bets out of a shrinking smartphone profit pool.
The stock market is not buying the ecosystem story. Xiaomi shares traded at 3.07 euros on Friday, down 1.77%, hovering just above the 52-week low of 3.04 euros. The year-to-date decline stands at over 31%, and the stock is trading nearly 29% below its 200-day moving average, underscoring a firmly entrenched downtrend. Over the past twelve months, the shares have lost almost half their value.
One bright spot: Latin America, where Xiaomi shipped 6 million smartphones in the quarter and captured a 17% market share. But that regional gain is not enough to offset the core challenge. Management must either accept further market share erosion in the budget segment or absorb even deeper profit hits — a dilemma that will persist as long as memory prices remain elevated. The Mini-LED launch in India on June 11 will provide an early test of whether premium AIoT products can actually stabilise margins, or whether the market will continue to price in structural smartphone weakness instead.
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