Core Viewpoint - The dismissal of Wang Teng, the general manager of Xiaomi's China market, due to serious violations such as leaking company secrets and conflicts of interest, highlights the challenges faced by Xiaomi in its smartphone business amid intense competition and internal transformation [3][5][11]. Group 1: Wang Teng's Background and Impact - Wang Teng was a prominent figure within Xiaomi, known for his rapid career progression since joining in 2016, where he played a key role in developing successful products like the K40 series [5][7]. - His high-profile social media presence, with over 1.8 million followers, contributed to Xiaomi's visibility but also set the stage for potential risks associated with personal conduct [7][11]. - Previous incidents, such as being penalized for leaking information about product launches, indicate a pattern of behavior that may have contributed to his eventual dismissal [7][11]. Group 2: Xiaomi's Financial Performance - Xiaomi reported a total revenue of 227.25 billion RMB for the first half of 2025, a year-on-year increase of 38.2%, with gross profit rising by 46.2% to 51.51 billion RMB [8][9]. - The smartphone segment generated 45.52 billion RMB, accounting for 39.3% of total revenue, but showed a decline in growth, with a 2.1% year-on-year decrease in the second quarter [8][9]. - The company's efforts to penetrate the high-end market have faced challenges, as indicated by a drop in smartphone gross margin from 12.1% to 11.5% year-on-year, reflecting increased competition and reliance on lower-margin products [11][12]. Group 3: Internal Management and Governance Issues - The incident involving Wang Teng underscores a broader issue of governance within Xiaomi, as the company struggles to adapt its management practices to its rapid growth and the complexities of a larger organization [11][12]. - Despite having strict internal regulations, the rapid expansion has led to increased management challenges, highlighting the need for a balance between internal discipline and business development [12]. - The reliance on charismatic leadership and social media engagement, while beneficial in early stages, poses risks as the company scales and faces intensified competition [11][12].