Xiaomi warns of smartphone price hikes in India as AI features and chip shortage drive costs up

Xiaomi has warned of impending smartphone price hikes in India during the second half of 2026, driven by a persistent global chip and memory shortage. To combat a severe market contraction and declining profits, Xiaomi and rival Huawei are shifting focus to premium segments, launching advanced foldable devices like the 18 Fold and Mate XT2 ahead of Apple's expected foldable iPhone launch. Meanwhile, Indian consumers face longer upgrade cycles, now averaging four years.

Smartphone price increases in India

• ▪Due to rising smartphone prices in India, consumers are increasingly relying on financing options to purchase devices, according to Xiaomi India's Chief Business Officer Sandeep Singh Arora.
• ▪Xiaomi India's Chief Business Officer Sandeep Singh Arora warned that smartphone prices in India will continue to increase in the second half of 2026, particularly during the festival period.

Global chip shortage impact

• ▪The ongoing global chip and memory shortage has slowed down the smartphone market and is expected to persist into the second half of 2026, according to Xiaomi India's Chief Business Officer Sandeep Singh Arora.
• ▪Chinese smartphone manufacturers are heavily impacted by rising component costs in 2026 due to their high exposure to budget devices, according to Counterpoint data.
• ▪Huawei's profits declined in the first half of 2026 in part because the company hoarded components to mitigate rising memory costs.

Extended smartphone upgrade cycles

• ▪The average smartphone upgrade cycle in India has extended from nine to twelve months in 2017 to approximately four years in 2026, according to Xiaomi India's Associate Director of Marketing & PR Sandeep Sarma.
• ▪The global chip shortage has contributed to stretching consumer smartphone upgrade cycles as buyers use their devices for longer durations.

Xiaomi Redmi Note series launch

• ▪Xiaomi is preparing to launch its Redmi Note 17 and subsequent Note series devices in India to solidify its market position.
• ▪Xiaomi's Redmi Note series has sold over 85 million units in India over the 12 years since its initial launch, according to company data.

Foldable smartphone competition

• ▪Huawei led the Chinese folding phone market with a 68 percent shipment share in the second quarter of 2026, according to Smart Analytics Global.
• ▪Huawei launched its Mate XT2 foldable smartphone on September 7, 2026, featuring a Kirin 9050 Pro chip and a redesigned double-folding mechanism.
• ▪Apple is expected to unveil its first foldable iPhone on September 9, 2026, which Smart Analytics Global projects could capture 25 percent of the global foldable market in 2026.
• ▪Xiaomi launched its 18 Fold foldable smartphone on September 7, 2026, featuring a 7.58-inch inner display, a proprietary Xring O3 processor, and ChangXin Memory Technologies LPDDR6 memory.

Premium segment market strategy

• ▪Xiaomi's profit declined for three consecutive quarters leading up to September 2026 as the company worked to reduce shipments of unprofitable low-end devices.
• ▪Smartphone manufacturers are heavily promoting premium segments, such as foldable devices, to raise average selling prices and escape a severe market contraction in 2026.