Xiaomi in 2025: from smartphones to smart cars—building a global ecosystem

Activities and value creation

Smartphones remain Xiaomi’s centre of gravity (still over half of revenue), but the group is accelerating in IoT: watches, TVs, air-conditioners and connected appliances. That segment topped RMB 100 billion in 2024 (+30 % year-on-year). A third pillar, internet services (advertising, games, cloud, fintech) accounts for roughly 9 % of sales yet delivers a gross margin above 75 %, a decisive profit driver. The “affordable hardware + high-margin services” mix lets Xiaomi win share on entry prices while protecting earnings. HyperOS, launched at the end of 2024, unifies the user experience across phone, home and car, opening new recurring-revenue streams.

Geography and international reach

Xiaomi now sells in more than 100 countries. China still generates 58 % of turnover, but international business is rising (42 %, +3 pts) thanks to India, South-East Asia, the Middle East, Africa and Europe, where the brand ranks in the top three for smartphones. Staying out of North America—off-limits for regulatory reasons—limits sanctions risk but also excludes a premium outlet.

Shareholding structure

Founder CEO Lei Jun owns c. 23 % of the capital and most voting rights via a dual-class structure; co-founder Lin Bin keeps just under 10 %. Around this core, BlackRock, Vanguard and Capital Group are leading institutional investors. A share-ownership scheme spreads equity across employees, aligning motivation with long-term goals.

Margin improvement

Group gross margin reached 21 % at end-2024 versus 18 % in 2022. Three engines drove that jump: the Xiaomi 14/15 premium line-up, the growing weight of internet services, and supply-chain optimisation through HyperOS. Management nonetheless reiterates a 5 % net-margin cap on hardware to keep prices sharp and the installed base expanding.

Risk of saturation in China

The domestic market is mature (smartphone penetration above 85 %) and rivalry with Honor, Oppo and Vivo is fierce. Xiaomi answers with rapid Mi Home roll-outs, up-market devices at home and distinctive launches such as the Leica-branded photo series. Yet real diversification is now happening on four wheels.

Strategic comparison

Lenovo, Dell, HP—Still mainly PC and infrastructure vendors focused on B2B. Profit comes at the sale and via service contracts.Xiaomi—Targets the mass consumer market, sacrificing margin on factory-gate prices to seed the largest possible installed base, then monetises it through MIUI/HyperOS ads and services.Apple—Runs exemplary vertical integration (chips, iOS, closed distribution) and premium positioning, earning >40 % gross margin per iPhone. Xiaomi covers all price points but is slowly “closing” its universe with HyperOS and in-house silicon for imaging and AI.Samsung—The head-to-head rival. The Korean giant controls memory, AMOLED screens and camera sensors, posting 10–15 % mobile margins, led by its foldable premium range—still a niche where Xiaomi is only a challenger. Xiaomi’s asset-light model (external manufacturing, Qualcomm/MediaTek chips) drives volumes in entry- and mid-tiers across India, South-East Asia and Africa, while the Leica-equipped Xiaomi 14/15 opens premium lanes in China and Europe. In short, Samsung bets on deep tech integration, Apple on luxury, and Xiaomi on price aggression, product agility and an expanding ecosystem, avoiding the pure-hardware dependence that weighs on Lenovo or Dell.

Smart EV and new initiatives

The Smart EV division embodies diversification. The SU7 electric sedan, launched late 2024, delivered 135 000+ units in twelve months and reached a 20 % gross margin, though the division is still loss-making because of factory and R&D spending. Targets: 350 000 deliveries in 2025 and first exports in 2027. A fatal autopilot accident and a decorative-hood controversy highlighted the sector’s sensitivity, prompting stricter testing and frequent OTA updates. Beyond cars, Xiaomi invests in robotics (CyberOne, CyberDog), augmented reality and home AI, allocating a quarter of its 2025 R&D budget to artificial intelligence.

Outlook

For 2025-2027, Xiaomi aims for 180 million smartphones shipped, 10 000 new Mi Home stores outside China and a revenue mix tilted toward international markets. Key drivers:

1.     Domestic premium upgrade cycle in China.

2.     Recurring services (cloud, fintech, home/auto subscriptions).

3.     Improving EV profitability via software leverage.

4.     Ongoing IoT expansion.With RMB 34 billion in cash, Xiaomi has ample fire-power to fund these bets without straining its balance sheet.

Conclusion

By combining volume growth, a service ecosystem and a bold move into smart mobility, Xiaomi seeks to move beyond smartphone champion status and become a global technology titan. Success will depend on turning these initiatives into durable cash flows while preserving the “technology for everyone” DNA that built the brand.

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