Xiaomi has recently unveiled its financial performance for Q2 2026, showcasing a total revenue of CNY 108.9 billion (approximately $16.2 billion). Despite a gross profit margin of 19.8% and an adjusted net profit of CNY 6.2 billion (around $919 million), the company has faced challenges particularly in its smartphone segment.
Revenue Breakdown for Q2: Smartphones & AIoT vs. EVs, AI and Others
A significant portion of Xiaomi's revenue, amounting to CNY 84.0 billion, originated from its smartphones and AIoT devices, which also recorded a gross profit margin of 20.0%. Meanwhile, its Smart EV, AI, and other new initiatives contributed CNY 24.9 billion, although the EV division faced financial losses during this quarter. The focus here will be on the smartphone sector.
The smartphone segment generated an impressive CNY 42.1 billion, with the IoT and Lifestyle Products accounting for an additional CNY 31.3 billion.
A Breakdown of Revenue by Different Product CategoriesXiaomi's smartphones attained a new record high Average Selling Price (ASP) of CNY 1,351 ($200). Notably, the premium smartphone segment now makes up approximately 32.1% of all Xiaomi devices sold in Mainland China.
Xiaomi Phones Reach Record High ASP, Premium Models Surge in Popularity
The company is heavily investing in Research & Development (R&D), having spent CNY 18.2 billion ($3.7 billion) thus far in 2026, forecasting a total expenditure of over CNY 40 billion ($5.9+ billion) for the year. A notable 47.2% of Xiaomi's workforce is dedicated to R&D initiatives.
Among their projects, Xiaomi's MiMo-V2.5 LLM was used to generate 10.5 trillion tokens in the week starting July 20, ranking first globally. This AI model is integral to the upcoming HyperOS 4, which promises enhanced memory preloading and a significant reduction in video playback frame drops (down 28.9%).
For the 24th consecutive quarter, Xiaomi holds the title of the world's third-largest smartphone manufacturer. In Q2 specifically, the company shipped 31.2 million smartphones, securing an 11.5% market share. However, this figure marks a substantial decline of 26.3% compared to the same quarter last year.
Xiaomi Smartphone Shipments in Q2
A review of Xiaomi's shipments and market share over the past few quarters paints a clear picture of the trend:
Smartphone Shipments and Market Share from Q2 2025 to Q2 2026
Regionally, Xiaomi remains in the top three manufacturers in most areas, except in India, where it ranks fourth. The company stands second in Latin America, the Middle East, and Southeast Asia, while holding the third position in Europe and Africa.
A Regional Breakdown of Xiaomi’s Market Share
In Mainland China, sales dropped to 8.4 million units (14.2% market share) in Q2 2026, down from 10.3 million (14.4% market share) in Q1 2026 and 11.5 million (16.8% market share) in Q2 2025.
Shifting focus to tablets, Xiaomi holds the fourth position both globally and in Mainland China, with shipments declining by 6.8% to reach 2.8 million units this quarter.
Xiaomi Tablet Global Shipment Numbers
Nevertheless, Xiaomi continues to excel in the wearable and True Wireless Stereo (TWS) markets, retaining the second position in both sectors globally and in Mainland China.
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