Xiaomi has posted strong financial results for the second quarter of 2026. However, its smartphone shipments declined sharply during the same period.
The company reported $16.2 billion in revenue for the quarter. Meanwhile, Xiaomi recorded a 19.8% gross profit margin.
Its adjusted net profit reached $919 million, reflecting continued growth across several parts of its business.
At the same time, Xiaomi’s smartphone business delivered an important milestone. The company’s smartphone Average Selling Price (ASP) reached a record $200.
The higher selling price highlights Xiaomi’s growing focus on premium smartphones. Moreover, premium devices gained a larger share of its sales in Mainland China.
Xiaomi Smartphone Prices Reach Record High
Xiaomi’s smartphone ASP climbed to $200 during the second quarter. That figure represents the highest average selling price recorded by the company.
Meanwhile, premium smartphones continued to gain ground in Mainland China. They represented 32.1% of Xiaomi smartphones sold in the market during the quarter.
The shift suggests that Xiaomi is selling a larger proportion of higher-priced devices. However, overall smartphone shipments declined compared with the previous year.
Xiaomi shipped 31.2 million smartphones globally during Q2 2026. The company held an 11.5% share of the global smartphone market.
Despite maintaining its position among the leading smartphone manufacturers, shipments fell 26.3% year-on-year.
Xiaomi has remained the world’s third-largest smartphone manufacturer for 24 consecutive quarters. Therefore, the company continues to maintain a strong global position despite weaker shipments.
Smartphones and AIoT Remain Major Revenue Drivers
Xiaomi’s smartphone and AIoT businesses generated $12.6 billion in revenue during the quarter.
The division recorded a 20.0% gross profit margin. Smartphones alone contributed $6.3 billion to the segment’s revenue.
Meanwhile, IoT and Lifestyle Products generated another $4.7 billion. The results show the continued importance of Xiaomi’s connected-device ecosystem.
The company has expanded beyond smartphones through products across its wider AIoT portfolio. Consequently, smartphones are no longer the only major contributor to Xiaomi’s overall business.
The company’s Smart EV, AI and Other New Initiatives division generated $3.7 billion during the quarter.
That division recorded a 19.2% gross profit margin. However, Xiaomi’s electric vehicle business reported a loss during the quarter.
Xiaomi Continues to Increase R&D Spending
Xiaomi is also increasing its investment in research and development. The company has already spent $3.7 billion on R&D this year.
Furthermore, Xiaomi expects its full-year R&D spending to exceed $5.9 billion.
R&D employees now account for 47.2% of Xiaomi’s workforce. The company is directing part of this investment toward artificial intelligence.
Its AI efforts include the development of the MiMo-V2.5 large language model. Xiaomi said the model generated 10.5 trillion tokens during the week beginning July 20.
According to Xiaomi, the figure placed MiMo-V2.5 first globally during that period.
The model also plays a major role in HyperOS 4. Xiaomi’s latest operating system is currently available in beta.
The company plans to introduce advanced memory preloading through HyperOS 4. Additionally, Xiaomi says the system will reduce dropped frames during video playback by 28.9%.
These developments show how Xiaomi is linking its smartphone business with its broader AI strategy.
Smartphone Shipments Decline Despite Higher Prices
Xiaomi’s record smartphone ASP comes as global shipments declined significantly. The company shipped 31.2 million smartphones during Q2 2026.
That figure represented an 11.5% global market share. However, shipments were down 26.3% compared with the same quarter last year.
Even so, Xiaomi remained among the top three smartphone brands across several major markets.
The company ranked second in Latin America, the Middle East and Southeast Asia. Meanwhile, it ranked third in Europe and Africa.
However, Xiaomi ranked fourth in India during the quarter.
The company also faced weaker sales in its home market. Xiaomi shipped 8.4 million smartphones in Mainland China during Q2.
That gave the company a 14.2% market share in the region.
For comparison, Xiaomi shipped 10.3 million smartphones in Mainland China during Q1 2026. Its market share stood at 14.4% during that quarter.
The decline becomes more noticeable when compared with Q2 2025. Xiaomi shipped 11.5 million smartphones during that period.
Its Mainland China market share then stood at 16.8%.
Therefore, Xiaomi’s latest results show a mixed picture. Smartphone prices are rising, yet shipment volumes are moving in the opposite direction.
Tablet Shipments Also Fall
Xiaomi also experienced a decline in tablet shipments during the quarter.
The company shipped 2.8 million tablets globally in Q2 2026. That represented a 6.8% decline from the previous period.
Despite the decline, Xiaomi remained the fourth-largest tablet manufacturer globally.
It also ranked fourth in the Mainland China tablet market.
The tablet business therefore continues to hold a significant position within Xiaomi’s broader consumer electronics portfolio.
Wearables and TWS Products Maintain Strong Position
Xiaomi continued to perform strongly in wearable devices and true wireless stereo products.
The company ranked second globally and in Mainland China across both categories.
This performance adds another layer to Xiaomi’s expanding hardware ecosystem. Smartphones, tablets, wearables and TWS products continue to support the company’s consumer technology portfolio.
Meanwhile, Xiaomi is also pushing further into electric vehicles and artificial intelligence.
However, the company’s latest quarterly figures underline a notable shift in its smartphone business. Xiaomi is achieving higher average smartphone prices despite selling fewer devices.
Its premium smartphones are gaining a larger share of sales in Mainland China. At the same time, the company continues to invest heavily in R&D and AI development.
Overall, Xiaomi’s second-quarter results present a mixed performance. Revenue reached $16.2 billion, while smartphone ASP climbed to a record $200.
However, global smartphone shipments fell sharply, and tablet shipments also declined.
Still, Xiaomi maintained its third-place global smartphone ranking. Moreover, its strong position in wearables and TWS products continues to support its wider device ecosystem.
