Core Viewpoint - The article emphasizes that Xiaomi's growth is under pressure due to the tightening of subsidies and increased competition in its traditional business, particularly in smartphones and IoT, while the automotive business shows potential but faces challenges ahead [11][12][24]. Overall Performance - Xiaomi Group reported total revenue of 113.1 billion RMB for Q3 2025, a year-on-year increase of 22.3%, primarily driven by the automotive business [6][27]. - Traditional business (smartphones and AIoT) revenue grew only 1.6% year-on-year, indicating weak performance in hardware sales [27][30]. - Gross margin improved to 22.9%, supported by the automotive business, while smartphone margins declined due to intensified competition [30][31]. Automotive Business - The automotive segment generated 29 billion RMB in revenue, with a shipment of 109,000 units and an average selling price of 260,000 RMB [6][35]. - The automotive business achieved a gross margin of 25.5%, although it slightly decreased from the previous quarter due to a reduction in the share of high-margin models [38][39]. - The core operating profit for the automotive business was 680 million RMB, marking its first profitable quarter [7][67]. Smartphone Business - Xiaomi's smartphone revenue was 46 billion RMB, down 3.1% year-on-year, reflecting the impact of subsidy reductions and increased competition [42][44]. - Smartphone shipments increased by 0.5% year-on-year, but the average selling price fell by 3.6% due to a higher proportion of low-cost models sold [44][46]. - The smartphone gross margin dropped to approximately 11.1%, influenced by rising component costs and market competition [48][23]. IoT Business - The IoT segment reported revenue of 27.6 billion RMB, a year-on-year increase of 5.6%, significantly lower than previous quarters due to subsidy reductions affecting large appliances [51][18]. - The gross margin for IoT products was 22.9%, benefiting from a higher proportion of sales in more profitable categories [52][53]. Internet Services - Internet services revenue reached 9.4 billion RMB, growing 10.8% year-on-year, primarily driven by advertising services [56][60]. - Advertising revenue was 7.2 billion RMB, up 16.1%, while value-added services saw a slight decline [56][66]. Overseas Market - Overseas revenue was 40.1 billion RMB, a slight decrease of 0.2%, with internet services growing by 19.1% to 3.3 billion RMB [60][62]. - Hardware sales in overseas markets continued to show weakness, reflecting a challenging demand environment [60]. Profitability - The core operating profit for the quarter was 6.7 billion RMB, with a core operating profit margin of 5.9%, impacted by declining smartphone margins and increased expenses [67][66]. - Traditional business core operating profit was approximately 6.03 billion RMB, while the automotive segment contributed 680 million RMB [67][66].