A Xiaomi executive warned on an earnings call that memory prices surging 'beyond imagination' are drawing smartphone makers into a long-term price-raising cycle, after which some players may suffer significant losses or even closure. The company reported a 27 percent year-on-year drop in fourth-quarter net profit.
Xiaomi's executive Lu stated on Tuesday's earnings call that memory prices were surging at a magnitude “beyond imagination,” drawing smartphone makers into a long-term price-raising cycle. “When the price-raising cycle ends, some players may suffer significant losses or even face closure,” he said, without elaborating. However, the challenge would also force the industry to innovate, he added. Xiaomi reported fourth-quarter net profit dropped 27 percent from a year earlier to 6.5 billion yuan (US$943 million), the lowest quarterly figure in a year and the first year-on-year decline since the second quarter of 2024. Fourth-quarter revenue rose 7.3 percent year-on-year and 3 percent from the previous quarter to 116.9 billion yuan, meeting analyst estimates of 5.78 billion yuan in profit and 116 billion yuan in sales. The firm felt the squeeze from rising memory costs, with smartphone shipments falling 11.6 percent year-on-year to 37.7 million units. This dragged revenue from its largest segment down 13.6 percent to 44.3 billion yuan. The average smartphone selling price sank 2.2 percent to 1,176 yuan from 1,202 yuan a year ago, despite the shift to premium models and higher memory costs.
