Xiaomi launches flagship smartphone as memory price surge threatens sales

Core Viewpoint - Xiaomi has launched its latest flagship smartphones, the Xiaomi 17 and 17 Ultra, amidst a significant increase in memory chip prices that could impact sales [1][2]. Group 1: Product Launch and Pricing - The Xiaomi 17 starts at 999 euros ($1,179) and the Xiaomi 17 Ultra starts at 1,499 euros, maintaining prices from last year's flagship despite rising memory costs [2]. - The surge in memory prices, which have increased by 80% to 90% in the first quarter, is attributed to a shortage of chips as supply is redirected to data centers for AI [3]. Group 2: Market Impact and Forecasts - Gartner forecasts a potential 13% increase in smartphone prices by 2026, while IDC predicts a 12.9% decline in the smartphone market due to the chip shortage [3]. - Analysts suggest that companies selling more expensive phones may be better positioned to absorb costs, but Xiaomi's primary volume comes from mid-range devices, which may face demand challenges [4]. Group 3: Company Performance and Strategy - Xiaomi's management has indicated that the industry may need to raise smartphone prices in 2026, highlighting the company's weaker position in the premium segment compared to competitors like Apple and Samsung [5]. - The company has been increasing its focus on the electric vehicle business, which now accounts for about 25% of total sales, providing a crucial revenue stream amid the memory chip crisis [6]. - In the September quarter, Xiaomi reported a 3% year-on-year decline in smartphone revenue, while its electric vehicle sales surged nearly 200% [7].