The price of Xiaomi products has increased, far exceeding that of the iPhone.

Author | Song Wanxin

Editor | Zhang Fan

Cover Source | Visual China

At the end of 2021, Xiaomi first announced that it would benchmark and learn from Apple in its products. After five years of exploration, the Xiaomi 17 series product line is fully aligned with Apple.

It is worth noting that the Xiaomi 17 is priced from 4,499 yuan. The standard version maintains the pricing level of the previous-generation Xiaomi 15, while the high-end configurations have increased in price by 200 to 500 yuan compared to the previous generation.

Since the launch of more than a dozen generations of Xiaomi phones, from the initial positioning of cost - effectiveness to the high - end positioning, the pricing of its phones has been rising steadily, even exceeding the price increase of Apple during the same period. Meanwhile, especially in the past five years, Apple has "increased the quantity without increasing the price".

01 The price increase is greater than that of Apple

By examining the pricing increase of the Xiaomi 1 series, it can be found that since the first price increase of the Xiaomi 6, the annual pricing increase has almost always exceeded 10% - the Xiaomi 6 increased by 15%, the Xiaomi 8 by 17.4%, and the Xiaomi 9 by 11.1%.

In 2020, Xiaomi released the Xiaomi 10. From this generation on, Xiaomi began to target the high - end market. The price directly jumped from 2,999 yuan to 3,999 yuan, an increase of 1,000 yuan, and the year - on - year increase exceeded 30%, which was the largest adjustment.

After that, the starting price of 3,999 yuan was maintained for three years. Last year, the starting price of the Xiaomi 15 was increased by 12.5% to 4,499 yuan, and this pricing was maintained for the Xiaomi 17. It can be seen that the high - end positioning of the Xiaomi digital series in the price range of 4,000 to 5,000 yuan has been firmly established.

Generally speaking, after the Xiaomi 10 series pushed the price to a high level, the price of the Xiaomi digital series went through a long - term period of stability and consolidation in the 4,000 - yuan range (Xiaomi 10 - 14). Starting from the Xiaomi 15, the price baseline was successfully raised to the 4,500 - yuan range, thus starting a new stage.

(Charting: 36Kr)

Looking at Apple's pricing during the same period, in 2017 when the Xiaomi 6 increased by 15%, Apple's iPhone 8 only increased by 9.3%. Except for the significant price increase of the 10th - anniversary limited - edition iPhone X, after the iPhone 12 was priced from 6,299 yuan, the iPhone 13 was priced down to 5,999 yuan, and this level has been maintained to date.
 

Therefore, if we only look at the starting price of the standard version of the digital series, Apple's price increase is far lower than Xiaomi's price exploration. In recent years, Apple has even shown the situation of "increasing the quantity without increasing the price" many times.

It can be seen that even during Apple's market upswing period (iPhone 7 - 11), Apple maintained a relatively stable price increase rhythm. After entering the 5G era, the price of the iPhone 12 increased due to factors such as 5G support and screen replacement. But starting from the iPhone 13, Apple continued to implement an extremely stable pricing strategy.

Currently, the price gap between the iPhone starting from 5,999 yuan and the Xiaomi starting from 4,499 yuan has been narrowed to 1,500 yuan. In 2011, the iPhone 4S was priced from 4,988 yuan, nearly 3,000 yuan higher than the 1,999 - yuan Xiaomi 1.

02 Xiaomi and Apple are in close combat

Price increases are accompanied by pain. At the nodes of Xiaomi's previous significant price increases, the short - term sales volume would decline to varying degrees.

According to relevant reports, in 2020 when the Xiaomi 10 was released, Xiaomi's sales volume in the second quarter plummeted by 35%, and it dropped to the fifth place in the domestic market. In the overseas market, especially in India, which contributes nearly half of the overseas market revenue, according to Canalys data, the overall smartphone market in India shrank by 48% in the second quarter, and the shipment volume was almost halved.

Before that, in 2016, Xiaomi also experienced a significant decline in sales volume, which was regarded as Xiaomi's low point. IDC data shows that in 2016, the annual shipment volume of Xiaomi phones decreased by 36% year - on - year, and the market share dropped from 15.1% in 2015 to 8.9%.

In order to reverse the situation, Lei Jun launched the Xiaomi 6 with the first price increase in 2017. Although this model was called a "divine machine", limited by supply - chain issues, the sales volume was only 5.5 million units.

Although the short - term sales volume of each generation of phones will be affected by price increases, in the long run, the sales trend of Xiaomi phones has not collapsed due to continuous price increases. Especially after shifting to the high - end positioning, the sales volume has increased steadily - the expected sales volume of the Xiaomi 14 in its life cycle is 8.8 million to 12 million units, and the Xiaomi 15 has reached nearly 2 million in sales volume just two months after its launch.

According to Canalys data, in the second year after Xiaomi's high - end transformation, that is, in the second quarter of 2021, Xiaomi's global smartphone sales volume surpassed Apple's for the first time and it was promoted to the second place globally.

In addition, profitability is the core victory of Xiaomi's price - increase strategy. The most direct result of targeting the high - end market is a significant increase in gross profit margin and single - unit profit. Although Lei Jun promised in 2018 that the comprehensive net profit margin of Xiaomi's hardware would not exceed 5%.

The financial report shows that the gross profit margin of Xiaomi's mobile phone business has increased from about 2% in the early stage to a double - digit level in recent years. In 2016, the gross profit margin of Xiaomi's mobile phone business was 3.45%. After the high - end transformation, this data exceeded 10% in 2021 and has been maintained at around 12% in the past three years.

In comparison, Apple's hardware gross profit margin has been stable at 30% to 40% for a long time, which is at the top level in the hardware industry.

(Trend chart of Xiaomi's mobile phone business gross profit margin. Charting: 36Kr)

However, once the iPhone 17 is released this year, the competitive situation may change.

Over the years, against the background of a relatively low price increase, iPhone has adopted a "slow - paced" configuration upgrade strategy to maintain a high gross profit margin. But as Apple's market share in China has been declining in recent years, the iPhone 17 has ended the long - term slow - paced strategy. Behind this is Apple's attempt to save the lost market share, which of course also means sacrificing gross profit.

Shifting from "protecting gross profit" to "protecting market share", Apple has begun to strive to protect its high - end market. It can be said that Xiaomi and Apple are now in close combat. The outcome is uncertain.

03 Valuation is being "decoupled" from the mobile phone business

In recent years, the valuation logic of Xiaomi Group has been undergoing a profound reshaping. The fluctuation of the gross profit margin of its core smartphone business and the change in the company's overall market value have shown an evolution trend from "strong correlation" to "gradual decoupling".

(Trend of Xiaomi's stock price since its listing. Source: Wind)

In the early stage of Xiaomi's development and before 2023, investors generally regarded it as an Internet hardware company, but the core of its valuation still highly relied on the scale and efficiency of the hardware business.

During this stage, a high gross profit margin usually meant the success of the high - end strategy (such as during the period of the Xiaomi 10 and 11 series), which would boost market confidence and drive the valuation up. A low gross profit margin would be interpreted by the market as "trading price for volume" and a lack of core competitiveness, which might lead to pressure on the valuation.

Specifically, during the period of the Xiaomi 10, the company's high - end transformation was initially successful, and the valuation started an upward channel. At the beginning of 2020, Xiaomi's stock price was in the range of about 10 to 11 Hong Kong dollars, and by the end of 2020, its stock price had reached 30 Hong Kong dollars. This means that during the life cycle of the Xiaomi 10, the company's market value increased by about 2 times.

During this period, the market's view of Xiaomi began to change from a "low - end cost - effective mobile phone manufacturer" to a "technology company with high - end capabilities and ecological potential".

During the period of the Xiaomi 11, it carried on the success of the Xiaomi 10. The Xiaomi 11 series made a big splash at the beginning of its release in early 2021, and the first - sale data set a new record. Immediately afterwards, Xiaomi's stock price once reached a record high of 35.9 Hong Kong dollars in January 2021, and the company's market value exceeded HK$90 billion.

However, since this year, the valuation logic of Xiaomi is being "decoupled" from the performance of the mobile phone business.

In this year's interim report, the gross profit margin of Xiaomi's mobile phone business declined year - on - year, but Xiaomi's stock price has increased by more than 50% since 2025 and has set a record - high quarterly profit (adjusted net profit of 10.83 billion yuan). This clearly shows that the current valuation logic of the capital market for Xiaomi no longer solely depends on the gross profit margin of the mobile phone business.

The important reason behind this phenomenon is naturally the explosion of Xiaomi's automotive business. In addition to the growth of automotive revenue, the more crucial thing is that its gross profit margin is as high as 26.4%, a significant increase of 3.3 percentage points quarter - on - quarter. It is not only much higher than that of the mobile phone business but also begins to approach the company's overall gross profit margin (22.5%).

Now, the mobile phone gross profit margin is no longer the core engine driving the change in Xiaomi's valuation, but it is still an important reference indicator for the company's health. Its long - term continuous deterioration will still cause concerns, but short - term fluctuations with clear reasons are now tolerated by the market.

The main driver of Xiaomi's valuation has shifted from the profitability of the mobile phone business to the growth prospects and market share of the electric vehicle business. The capital market is using a valuation model for new - energy technology companies to re - evaluate Xiaomi.

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