Lei Jun: Competing with Apple is a long and painful process.

Author: Qiu Xiaofen

Editor: Su Jianxun

At 7 p.m. on September 25th, Lei Jun of Xiaomi held his sixth "Annual Speech" and launched a series of models in the Xiaomi 17 series.

In the speech themed "Change", the biggest highlight was undoubtedly that Lei Jun fully disclosed Xiaomi's tortuous journey of chip - making over the years. As a sensitive topic, Xiaomi rarely elaborated on the chip story in detail before.

Lei Jun's Annual Speech in 2025

"There are huge misunderstandings about us from the outside world," Lei Jun told the media including "Intelligent Emergence" in a media interview after the speech. In the eyes of the outside world, it seems that Xiaomi succeeded in chip - making overnight, but he said bluntly, "Actually, we just get used to announcing things after we've finished them."

Xiaomi's chip - making can be traced back to "Songguo Electronics" in 2014, 11 years ago. At that time, after three years of R & D, the mid - range phones equipped with Xiaomi's first self - developed chip, "Surge S1", sold 600,000 units. It was a good start, but Lei Jun disclosed in the speech that he soon realized that "the path of Songguo Electronics couldn't go on."

So, Xiaomi's first attempt at chip - making only lasted for four years. In 2018, Lei Jun interrupted the R & D of the mobile phone SoC. This decision was based on his two counter - intuitive judgments about chip - making by mobile phone manufacturers.

First, Lei Jun believes that when mobile phone manufacturers make SoC chips, they should start from the high - end market rather than the mid - and low - end market. Second, he doesn't agree with the practice of mobile phone manufacturers separating the chip team, which will lead to inconsistent goals between the chip team and the mobile phone team, resulting in difficult collaboration.

Since restarting chip R & D at the beginning of 2021, Lei Jun also recalled two experiences of wavering in confidence.

The first was in 2022 when Xiaomi was affected by international politics, and the company's revenue dropped by 15%. When the main revenue declined, Xiaomi also wavered about whether to continue investing in the heavy - asset chip R & D. The second was when witnessing the sudden dissolution of OPPO's Zeku team, there was also a panic moment within Xiaomi.

But Lei Jun himself never hesitated about "chip - making". He asked the team a question in the hope of dispelling everyone's doubts: "If we give up chip - making, will we be glad that there will be tens of billions more on the company's account in ten years? Or will we regret that Xiaomi will lose the chip business forever?"

The continuous investment finally paid off. The Xuanjie O1 chip with a 3nm process was successfully taped out at one time. Now, Lei Jun defines chip - making as "the only way for Xiaomi's success".

At the same time, Lei Jun also promised that Xiaomi will invest at least tens of billions of yuan in chips for at least ten years in the future.

In addition to elaborating on the chip - making story, in the group interview session with the media, Lei Jun also publicly responded to the competitive relationship with Apple.

This year, Apple has made a big improvement on the iPhone 17 series, changing its previous label of "incremental updates". In order to challenge Apple, Xiaomi even changed the originally planned "Xiaomi 16" to "Xiaomi 17".

"The competition with Apple is a long and painful process," Lei Jun summarized to the media. Xiaomi's competitive strategy against Apple is a bit like the past "benchmarking management" - breaking down many dimensions and then making breakthroughs and benchmarks step by step.

However, Lei Jun also said that in the past, Xiaomi's benchmarking against Apple mainly focused on configuration and parameters, but in the future, it hopes to start from the experience aspect. "We hope to benchmark against Apple and finally surpass it."

Lei Jun, photographed by "Intelligent Emergence"

If you pay close attention to the ranking of the Chinese mobile phone market share, you can find that the situation of the Chinese mobile phone market in the past few years has basically been that "six mobile phone manufacturers each take the lead for two or three months, and each company's share basically fluctuates around 15%".

In Lei Jun's view, the Chinese mobile phone market is "the most outrageous market" he has ever seen, and the difficulty far exceeds the competition in the automotive field.

In response to this, Lei Jun also said that Xiaomi has currently given up the possibility of a "quick victory".

"In the past two years, we changed our goal to a steady annual growth of 1%. We aim to capture 20% of the Chinese market in five years," he said bluntly. "Time is Xiaomi's friend, and we are long - distance runners."

In Lei Jun's Annual Speech in 2025, Lei Jun mentioned the return of the Xuanjie O1 chip

The following is a summary of part of Lei Jun's speech this time:

Good evening, everyone! Welcome. Today is my 6th annual speech. In March last year, we launched Xiaomi cars, and Xiaomi became the first technology company spanning the three major fields of mobile phones, cars, and home appliances. In May this year, we launched the Xuanjie O1 chip, and Xiaomi became the first company in the Chinese mainland to release a flagship chip with a 3nm process.

On the occasion of Xiaomi's 15th anniversary, the two consecutive major breakthroughs in the automotive and chip fields have impressed many people, making it seem as if Xiaomi has become a different company overnight. In fact, these changes all stemmed from a soul - searching reflection five years ago.

01 Big Reflection

1.1 Pain and Anxiety

Five years ago, in 2020, Xiaomi celebrated its tenth anniversary. At that time, we had been listed for two years, and our annual revenue had exceeded 200 billion yuan, successfully ranking among the "Fortune Global 500". In the eyes of many people, Xiaomi had been very successful. But inside me, there was an indescribable sense of anxiety.

In our industry, Apple, Samsung, and Huawei are like insurmountable mountains, and it seems almost impossible to catch up with them. Should we just accept our fate and give up, or should we continue to fight?

After ten years of entrepreneurship, many people in the team were tired and wanted to take a break. I completely understand this. In fact, I was also very tired. But in the next decade, the competition will only become more intense. How many people will still be willing to fight side by side with me?

What's even more tiring is that the Internet was full of various doubts, criticisms, and even attacks. Many people had biases against Xiaomi, stubbornly believing that "Xiaomi is just an assembly factory", "Xiaomi has no technology, it just sells cheap products", "Xiaomi only knows how to do marketing and will not last long", and so on. During that period, I was deeply trapped in self - doubt.

After struggling for a long time, I made up my mind to face all the problems directly, find a way to break the deadlock, and change our destiny. At first, I didn't know how to solve these problems. Fortunately, I learned Go when I was a child and learned a very effective method, which is: retrospection.

Retrospection means answering three key questions: "What did we do right? What did we do wrong? If we could start over, what should we do?" Once we figure out these three questions, the direction for the future will be clear.

So, we started a long and in - depth retrospection. In each retrospection meeting, we invited seven or eight people to have an open - ended discussion, which often lasted for four or five hours. We held forty or fifty such meetings, which lasted for half a year.

1.2 Where is Xiaomi heading?

Xiaomi was founded with the original intention of using Internet technology and methods in manufacturing. After this half - year retrospection, we firmly determined the development path for the next stage: continuously invest in core underlying technologies and transform from an Internet company into a "hard - core technology company". And we plan to invest 100 billion yuan in the R & D of core technologies in the next five years.

You should know that our annual R & D investment in 2019 was only 7.5 billion yuan. "100 billion in five years" is a huge figure for us.

From this moment on, Xiaomi's DNA began to be reshaped. "Technology as the foundation" became an unchangeable principle for us, and the passion for "starting a new business" was completely ignited.

1.3 Remodeling the Team

In the following five years, we introduced a large number of talents with the determination of starting a new business and remodeled the core management team. This huge change can be seen from the list of our senior management team:

In Lei Jun's Annual Speech in 2025, Lei Jun mentioned the return of the Xuanjie O1 chip

First of all, two of the co - founders, Lin Bin and Liu De, continued to work with me.

We actively introduced top - notch external talents, including a group of senior executives such as Lu Weibing, Zeng Xuezhong, Wang Xiaoyan, Lin Shiwei, and Liu Wei. Among them, some were directly appointed as senior executives, and some were introduced as middle - level managers and gradually grew into senior executives. These introduced senior executives have made significant contributions to Xiaomi's development.

At the same time, we attached great importance to internal cultivation and promoted a group of young senior executives such as Zhu Dan, Qu Heng, Xu Fei, and Zhang Jianhui. They are all among the earliest employees of Xiaomi. After more than a decade of tempering, they have gradually grown into a new generation of leaders and entered the core management team.

For example, Zhu Dan, with the employee number 54, is one of the earliest engineers at Xiaomi. He is now in charge of building the chip business, and his team successfully developed the Xuanjie O1.

02 The Chip Journey

When it comes to the Xuanjie O1, many friends were very surprised: How did Xiaomi "suddenly" make such a powerful chip? Before the chip was launched, we never disclosed it to the outside world, and few people within the company knew about it. Next, let's talk about the ins and outs of the chip business.

2.1 Songguo Electronics

Xiaomi has always had a "chip dream".

Eleven years ago, in September 2014, Xiaomi, which had only been in business for a little over four years, fully funded the establishment of Songguo Electronics and resolutely started to develop its own mobile phone chips.

After three years of hard work, in 2017, the "Xiaomi Surge S1" was officially launched and installed in a mid - range phone, selling 600,000 units that year. This seemed like a very good start, but I knew clearly that the path of Songguo Electronics couldn't go on.

In 2018, we made a difficult decision: to stop the R & D of the mobile phone SoC chip, downsize the team, and continue to work on some small chips, just to keep a glimmer of hope alive.

During the retrospection five years ago, when the topic of chips came up, everyone still had lingering fears. To solve this knot, we had to figure out where Songguo Electronics had failed. We spent a long time discussing it.

First, the entry point was wrong. A counter - intuitive key conclusion: For self - developed mobile phone SoCs, there is no chance at all in the mid - and low - end market; only by targeting the high - end market is there a glimmer of hope. The reasons are very complex, and I won't go into details here. Apple and Huawei also made breakthroughs in this way back then.

In addition, self - developed chips also require the full support of the mobile phone team. Just think about it, why would the mobile phone team not use mature chips but instead take on huge risks? Without completely consistent goals and the determination to share weal and woe, this thing definitely won't succeed. At that time, Songguo Electronics was relatively independent in management, and it was very difficult to coordinate with the mobile phone team. I often coordinated personally, but it was still hard to solve the problem.

In this way, the failure of Songguo Electronics became inevitable.

2.2 A Difficult Decision

But chips are something we can't avoid. Almost all the world's top technology giants have eventually become chip giants.

I am very clear in my heart that chips are the only way for Xiaomi's success. But the complexity of chip - making today far exceeds that of ten years ago. For example, self - developing a mobile phone SoC takes at least ten years and an investment of at least 50 billion yuan. Will we definitely succeed after spending so much money and so much time? What if we don't succeed? The whole discussion process lasted for more than half a year, and everyone was unsure and couldn't make up their minds.

Later, I encouraged everyone, "If we don't do chip - making, we will definitely lose. How do we know that Xiaomi can't succeed if we don't try?"

Finally, at the beginning of 2021, a new round of the chip journey began again.

The shadow of Songguo Electronics' failure still loomed over many people's minds. We had to explain desperately to every partner before they could understand. After much trouble, we finally re - assembled the team.

2.3 Never Waver

In the second year of the project, we encountered even greater difficulties. At that time, Xiaomi's business was affected by the international economic situation and geopolitics, and the business suffered a significant decline, with the revenue dropping by 15% suddenly. This was the first time in Xiaomi's history.

At this time, we were under huge pressure. We were supporting "two children through college" at the same time - car - making and chip - making, each of which was a major project with an investment of tens of billions of yuan. This pressure was suffocating.

"Will continuing with chip - making drag the company down?" Gradually, there were some skeptical voices in the team, and the internal morale was a bit shaken.

In May 2022, I organized a senior management meeting to discuss it seriously. The atmosphere at the meeting was very solemn. Everyone knew clearly that if we gave up this time, Xiaomi would be forever out of the chip business, and the market would not give us another chance. Finally, a senior executive frankly