Billionaire Xiaomi founder Lei Jun unveils a US$630 answer to iPhone 17
Lei challenges Apple directly, shifting Xiaomi’s branding and timing to rival the US company’s best
[BEIJING] Xiaomi’s billionaire co-founder unveiled a US$630 smartphone designed to take on the just-released iPhone 17, underscoring the Chinese company’s broader ambitions to take on US rivals from Apple to Tesla.
The Xiaomi 17, which will be offered in Pro and Pro Max models just like Apple’s marquee series, starts at 4,499 yuan (S$816) for the most basic model, rising to 5,999 yuan at the top end, co-founder and chief executive officer Lei Jun said via a livestreamed event on Thursday (Sep 25). That is more than US$100 cheaper than the base iPhone 17, introduced just weeks before during Apple’s annual product launch event.
Lei is going after longtime foe Apple in the most direct fashion, shifting Xiaomi’s branding and timing to measure his products against the US company’s best. In a two-hour online presentation, the CEO orchestrated a side-by-side comparison with the iPhone on battery life, display quality and camera capabilities.
On Thursday, Lei also pitted his cars against Tesla’s, singling out the Model Y. Xiaomi is riding high after a successful initial expansion into electric vehicles helped triple its market value over the past year. He again sketched out his company’s years-long research effort into unlikely arenas from cars to chips. The 55-year-old entrepreneur has previously outlined plans to create AI models and spend US$7 billion developing its own mobile processors, part of a broader effort to drive Xiaomi beyond the consumer gadgets it’s known for.
Lei, who has called EVs his last big entrepreneurial venture, is trying to transform and elevate a company that started out by undercutting the iPhone. “We’ve undergone a profound transformation over the past five years and today a completely new Xiaomi stands firmly in front of a new era, “Lei said of Xiaomi’s evolving business portfolio.
Beijing-based Xiaomi is aggressively pushing for a bigger slice of the premium segment. But confronting Apple means taking on a US company that controls 62 per cent of premium smartphone sales globally, comprising handsets costing US$600 or more. Xiaomi has only a single-digit share, according to Counterpoint Research.
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Now worth close to US$200 billion as investors bet on its expansion into EVs, Xiaomi has carved out a space for itself in a market dominated by Shenzhen-based BYD and Elon Musk’s Tesla. By the June launch of its second car, the YU7 SUV, Xiaomi’s first model was outselling the Tesla Model 3. That was slightly more than a year after the first deliveries started in the spring of 2024.
“Xiaomi’s EV segment could be its main sales-growth driver in the next few years, as its revenue contribution could double to about 20 per cent this year from 9 per cent last year. The segment’s breakeven could be on the horizon, as production at the second factory quickly ramps up,” said Steven Tseng and Sean Chen analysts of Bloomberg Intelligence. “In 2026, we expect EVs to contribute 10-15 per cent of the company’s profit. Its Internet of Things business could bolster sales growth of consumer electronics products, though smartphone growth is set to slow. The firm’s gross margin could expand to 22.8 per cent this year, we calculate, due to improving economies of scale and product mix.”
The YU7 got 289,000 orders within an hour of its announcement. Wait times for the company’s cars are now measured in months, and Xiaomi plans to ramp up production and start selling its first EV in Europe by 2027. Xiaomi has delivered more than 40,000 YU7 cars since its launch, Lei said on Thursday.
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A loss of confidence over the summer, when a fatal accident involving a Xiaomi SU7 sedan triggered regulator scrutiny, appears to have already blown over. Demand for the company’s cars remains high and Xiaomi has taken remedial steps, including a recall of more than 116,000 vehicles and an over-the-air update to improve its driver assistance features.
Beyond smartphones and its budding EV venture, Xiaomi is also endeavouring to bolster its chipmaking capabilities.
This year, Lei said the company plans to invest at least US$7 billion into developing its own mobile processor and it now has a team of 2,500 focused on that task. The company showcased its Xring O1 chip in May, designed to power a new generation of devices including the Tablet seven Ultra. BLOOMBERG
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