AsianFin -- Xiaomi Corp.’s billionaire co-founder, Lei Jun, has taken on Apple’s iPhone 17 with the introduction of the Xiaomi 17 smartphone, priced at $630. The new device, available in Pro and Pro Max models, underscores Xiaomi’s ambitions to compete head-to-head with U.S. rivals such as Apple and Tesla.
At a livestreamed event on Thursday, Lei introduced the Xiaomi 17 series, which starts at 4,499 yuan ($631) for the base model, with prices rising to 5,999 yuan for the higher-end version. This pricing is notably over $100 cheaper than the base iPhone 17, which was revealed just weeks ago at Apple’s annual product launch event. The move signals Xiaomi’s growing determination to carve out a larger share of the premium smartphone market, traditionally dominated by Apple.
In a two-hour livestream presentation, Lei performed a side-by-side comparison between the Xiaomi 17 and the iPhone 17, highlighting key areas such as battery life, display quality, and camera capabilities. This marks a more aggressive positioning from Xiaomi, which has long sought to position itself as a rival to Apple.
But Lei’s ambitions go beyond smartphones. On the same day, he also highlighted Xiaomi’s growing footprint in the electric vehicle (EV) market, positioning the company as a formidable contender against Tesla. Xiaomi, which has recently made significant strides in EV production, has seen its market value triple over the past year as it expands into new sectors.
Xiaomi’s focus on cars was emphasized by Lei as he pitched his company’s EVs directly against Tesla’s Model Y. With a successful debut in the electric vehicle market, Xiaomi’s stock has soared, and Lei expressed plans to continue this growth trajectory. He laid out his long-term vision for Xiaomi, which now includes AI models, mobile processors, and a $7 billion investment in the development of its own chip technology.
"Electric vehicles are my last big entrepreneurial venture," Lei said, highlighting the importance of Xiaomi’s foray into this space. Over the past five years, Xiaomi has undergone a major transformation, with Lei positioning the company as more than just a smartphone maker. "Today, a completely new Xiaomi stands firmly in front of a new era," he added.
With its new focus on high-end products, Xiaomi is taking on Apple in the premium segment, where the U.S. company currently holds a dominant position. Apple controls 62% of global premium smartphone sales—devices priced at $600 or more—while Xiaomi currently holds only a single-digit share, according to Counterpoint Research. However, with its aggressive push into EVs and other tech ventures, Xiaomi is aiming to diversify and grow its portfolio.
As part of its broader strategy, Lei announced that Xiaomi plans to invest at least $7 billion into the development of its own mobile processor, with a dedicated team of 2,500 employees working on the project. The company showcased its Xring O1 chip earlier this year, which is designed to power a new generation of Xiaomi devices, including its Tablet 7 Ultra.
Xiaomi’s entry into the EV market has also been marked by impressive growth. The company’s first EV, the YU7 SUV, has outsold the Tesla Model 3 in China, just over a year after its launch in spring 2024. Xiaomi’s quick success in the automotive space has caught the attention of both investors and competitors, as the company rapidly establishes itself as a serious player in the EV market, alongside rivals like BYD and Tesla.
Now valued close to $200 billion, Xiaomi’s expansion into electric vehicles and its ongoing push into premium smartphones have positioned the company as a significant threat to both Apple and Tesla. With a strong focus on innovation, Xiaomi is intent on making a lasting mark on the global tech landscape.
Main points from Lei Jun’s conversation with media, edited for clarity and brevity:
Q: Over the past five years, Xiaomi has undergone tremendous changes, making significant moves in high-end fields from cars to chips. It feels like you’re moving away from everyday or low-end products. What’s the thinking behind this? And second, what’s the biggest change at Xiaomi over these five years?
Lei: When Xiaomi was founded fifteen years ago, our mission was to consistently create products that move people and are honestly priced, so that everyone in the world can enjoy the benefits of technology—a concept we call “technology for all.” Entering manufacturing fifteen years ago, our goal was to use internet technology and methods to drive the popularization of tech.
Five years ago, we realized that smartphones had become ubiquitous, and the market had reached a stage of overcapacity where users were looking to upgrade. We firmly set out a high-end strategy, benchmarking Apple across the board, entering the premium segment to better meet user needs. Over these five years, we’ve put a lot of effort into the high-end smartphone market, learning through trial and error and gaining valuable experience. When we entered the automotive sector, we were also determined to make high-end vehicles.
According to our Q2 financial report this year, the average price of Xiaomi cars including tax was 289,000 yuan, which is on par with BBA (Mercedes-Benz, BMW, Audi), already placing us in the high-end segment. Especially with the Ultra model, priced between 500,000 and 600,000 yuan, selling in such large volumes, I’m increasingly convinced that as long as we invest in R&D and continue to move forward in the high-end market, learning and improving step by step, we have a real chance to truly establish ourselves in the premium segment.
Q: Over the past few years, with Xiaomi’s advancements in technology and products—including 5G and the Xiaomi 17 series—Xiaomi’s image among young people has shifted from a high-value, geeky brand to one that represents fashionable tech trendsetters. What’s your view on this new positioning? What efforts has Xiaomi made to achieve this?
Lei: Fifteen years ago, Xiaomi positioned itself as a geek brand, made for tech enthusiasts online. We never expected our growth to be so rapid, and we soon became a mainstream brand. When that happened, we weren’t fully prepared. The pain we experienced five or six years ago was due to growing too quickly—many people didn’t understand us and had their own biases, and on top of that, we didn’t do a good enough job ourselves.
After half a year of reflection, we made several major decisions: to push for a more premium brand image and gain recognition from more high-end and female users. Five or six years ago, we were more of a male-oriented brand, but today, take Xiaomi EVs as an example—nearly half of our customers are women. The user profile has changed dramatically. This is a direct result of our push for premiumization five years ago. Throughout these five years of exploration, we’ve developed our own methodology for premiumization: leading in technology, perception, and aesthetics. We have to improve ourselves in these three dimensions to truly achieve a premium brand. Every quarter, Xiaomi holds seminars to review our achievements, challenges, and lessons learned.
Q: Was 2020 the toughest period for Xiaomi’s premiumization efforts? Over the next five years, how do you see the challenges of going premium evolving? At this point, does the outcome match your initial expectations?
Lei: Looking back over the past five or six years, the greatest pressure we faced in premiumization was in 2022. Due to the global economic environment and geopolitical factors, our performance dropped by 15%, and in 2023, it declined by another 3%. For a company of our size, that was enormous pressure. That was the most challenging period.
The path to premiumization has been full of twists and turns. When we first started, everyone was nervous, but the results in the first year far exceeded expectations. People started to think premiumization was easy, but then we hit a rough patch and had to climb our way back up, step by step. Xiaomi EVs have also provided us with a lot of experience and lessons throughout the entire premiumization process. On this journey, we still need time to keep learning, bit by bit.
Q: You mentioned that Xiaomi aims to benchmark itself fully against the iPhone. How should we interpret this statement and the recent rebranding? Now that Chinese manufacturers are shifting from internet companies to hardcore tech companies, how do you see this ongoing innovation and breakthrough?
Lei: The recent renaming from Xiaomi 16 to Xiaomi 17 has sparked a lot of public discussion, which honestly surprised me. The main reason for the change is that, after fifteen years of making smartphones, Xiaomi has accumulated some stereotypes—some people have very fixed opinions about us. I think it’s time for everyone to take a fresh look at Xiaomi phones. This generation represents a leap in product capability, a true breakthrough. Compared to the entire iPhone 17 lineup, we’ve surpassed them in many areas.
Five years ago, we set our sights on benchmarking Apple. First, you need the courage to benchmark yourself against the world’s best. Only by benchmarking can you gradually catch up and eventually lead. The Xiaomi 17 surpasses Apple in many aspects, such as battery technology, display technology, cooling, sensors, periscope cameras, computing, and internal stacking—we’ve made significant innovations in all these areas. This is the foundation and confidence that allow us to directly benchmark Apple. Through this renaming, we hope people will re-evaluate Xiaomi phones and see our determination to challenge the world’s number one.
Q: What are your expectations for the Xiaomi 17 series? In the long run, how do you see the competition between Xiaomi or other Chinese smartphone brands and the iPhone? What’s the future outlook?
Lei: Apple is a truly great company, and we have a lot to learn from them. The iPhone 17 series is selling extremely well, and online reviews say they’ve “squeezed out all the toothpaste”—they’ve made a big leap compared to the past. In many technical areas, the Xiaomi 17 is ahead, so we’re confident in benchmarking ourselves comprehensively. But competing with Apple will likely be a long and challenging journey. We need to learn from Apple wholeheartedly and perfect every detail, step by step. Apple is meticulous in every aspect, leaving no weak spots. We’ll start by breaking through in ten areas, then twenty, and gradually cover more ground. Comprehensive benchmarking isn’t just about specs and parameters—it’s about leading in technology and user experience, and even surpassing Apple.
Q: In the next three to five years, has Xiaomi found a new path for smartphone sales growth?
Lei: Globally, the smartphone market is extremely competitive—more so than the automotive industry. Our global competitors are Apple, Samsung, and Huawei, all tech giants, making the competition especially tough. The Chinese market is the most intense I’ve ever seen: the six major players each have about 15–16% market share, and the leader changes every two or three months—today you’re first, a few months later you might be sixth. All five of our main competitors are remarkable companies, and I truly admire their capabilities. Under such intense pressure, we gave up on the idea of quick wins long ago. Two years ago, I set a goal: to steadily grow our market share by 1% each year, reaching 20% in five years. We’re taking it step by step.
Xiaomi is a long-distance runner—the longer the race, the stronger we become. Give us another five years, and you’ll see even more dramatic changes at Xiaomi. In the entire smartphone market, especially in China, we are fighting a war of endurance, and that happens to be Xiaomi’s strength. We strive to learn from all our peers, leaving no blind spots in any dimension, becoming an all-rounder. We turn competition into a twenty-dimensional comparison, measuring ourselves against our peers in every aspect to identify gaps and improve.
Q: Last month, the media reported that the Xiaomi automobile factory successfully completed its technological upgrades. Congratulations to Xiaomi! How will these upgrades help increase the production capacity of Xiaomi vehicles, which so many users are eagerly awaiting? How much of the order backlog do you expect to fulfill in the fourth quarter of this year?
Lei: The Xiaomi automobile factory has always maintained a high level of automation, and we’re continuously upgrading our technology to improve efficiency and adjust production scheduling. In just two months and twenty days, we expect to deliver over 40,000 vehicles. But to be honest, there is still a huge gap compared to the demand from our prospective customers. We will keep working hard to improve.
Xiaomi has been in the automotive industry for less than a year and a half—our first car was delivered on April 3, 2024. We’ve only been at this for a year and a half, and honestly, we’ve done quite well, but we’re still far from meeting everyone’s expectations and requirements. High standards and high expectations are a good thing. We shouldn’t always see ourselves as newcomers to the automotive industry. Everyone should hold us to high standards, and we must hold ourselves to those same standards. Our production efficiency is improving at a very rapid pace.
Q: After the launch of Xiaomi vehicles, the market and user feedback have been very enthusiastic. However, there has also been false information online smearing Xiaomi, as well as unfriendly voices targeting Xiaomi car owners—even cyberbullying in the comment sections and private messages. What’s your view on this?
Lei: After the launch of Xiaomi vehicles, we became one of the most heavily targeted brands online. We fully support the joint action by six ministries to crack down on paid trolls and malicious PR. The automotive industry needs a clean and upright environment to sustain its development. Xiaomi vehicles have been victims in this regard, and we hope society at large will join the call to combat malicious PR and paid trolls, as they create many obstacles for the industry’s growth.
Q: Tomorrow happens to be the launch of the Li Auto L6. You’ve always had a good relationship with Li Auto. Could you share in what ways you and Li Auto exchange ideas about car manufacturing? Any recent insights from your discussions?
Lei: Xiaomi Auto is a latecomer, and we are truly grateful to all the pioneers in the new energy vehicle industry. Speaking of our relationship with Li Auto, we were fortunate to be early investors in NIO and XPeng through Shunwei and Xiaomi. Although we didn’t invest in Li Auto in its early days, since it is a Beijing-based company, we have had many collaborations. I have great admiration for Li Auto’s remarkable contributions to the new energy vehicle sector. Li Auto pioneered the path of spacious extended-range SUVs, and many automakers have followed in their footsteps. I would like to take this opportunity to once again express my highest respect to Li Auto. Thank you.
