🧠 Food for thought

Implications, context, and why it matters.

Xiaomi’s electric vehicle (EV) momentum overshadows smartphone struggles in China

• Q3 revenue rose 22.3%, while smartphone shipments ticked up 1% to about 43.4 million, with China down but Asia-Pacific and other regions up 1.
• Forecasts put auto output at about 109,000 in Q3, with break-even (where revenue covers costs) arriving sooner and gross margin near 25.8% 2.
• Per-vehicle losses fell to 3,690 yuan in Q2 from 37,000 yuan a year earlier, and October deliveries topped 46,000 units 32.
• In China the smartphone market shrank for a second straight quarter after subsidies expired 1, and Xiaomi posted Q3 revenue of 113.1 billion yuan that missed analyst forecasts.

Component shortages create pricing power for smartphone accessory makers

• Tighter supply plus higher chip and display costs will push near-term phone prices up, hurting demand in the low-end segment where Xiaomi competes 1.
• Accessory makers can ride Xiaomi’s 43.5 million Q3 shipments by focusing on Europe and Latin America, where it gained share 4.
• The market is splitting toward under $100 and over $700 tiers, while the mid-range weakens, so steer premium accessories to Xiaomi’s higher-end models 1.