Following the Spring Festival holiday, several smartphone manufacturers have publicly announced and implemented price hikes, with some models increasing by up to 500 yuan. In response to inquiries about why Xiaomi has not yet raised its smartphone prices, Lu Weibing, Partner and President of the Mobile Phone Department at Xiaomi Group, provided a clear explanation during a recent investor conference call.

Lu Weibing stated that Xiaomi's highly diversified product portfolio, which spans smartphones, tablets, PCs, automobiles, and smart home appliances, enables the company to currently absorb rising cost pressures through internal adjustments. He emphasized, "The speed and magnitude of memory price increases have exceeded market expectations, but our diversified business model means that cost impacts vary across different product categories, providing the company with strategic buffer space."

Specifically, the proportion of memory costs in different products determines the extent of the impact. Smartphones, tablets, and laptops have been significantly affected, while smart electric vehicles and IoT and smart home appliance products have experienced relatively minor effects. Lu Weibing acknowledged that if rising costs were not passed on to consumers at all, it would be difficult for the company to sustain normal operations. Although Xiaomi is under considerable pressure, it will continue to strive to absorb costs internally and manage the situation independently. Price adjustments will only be considered if the pressure becomes unsustainable, and the company hopes for consumers' understanding.

Furthermore, Lu Weibing highlighted several core advantages that enable Xiaomi to navigate the current wave of price increases. First, the company's diversified product line mitigates concentration risks in any single category. Second, Xiaomi has secured long-term supply contracts with major global memory suppliers, eliminating concerns about supply disruptions. Most importantly, based on earlier forecasts, Xiaomi proactively stockpiled large quantities of components, resulting in ample inventory that provides a clear cost advantage and supply security in the short term.

Although Xiaomi's current approach focuses on internal cost absorption, Lu Weibing candidly noted that if external pressures continue to intensify, price adjustments may be inevitable in the future. He believes that the memory chip price hike cycle will eventually end, leading to a structural reshaping of various industries. Challenging external conditions often serve as a catalyst for technological innovation. This period represents not only a cost challenge but also a significant opportunity to drive industrial upgrades and innovation. Leveraging stable supply chain relationships and sufficient inventory reserves, Xiaomi will use this window to further optimize its product structure and employ technological measures to mitigate operational risks associated with rising costs.