Xiaomi has unveiled its latest flagship smartphones, the Xiaomi 17 and 17 Ultra, at Mobile World Congress in Barcelona. The move comes as the global technology industry grapples with an unprecedented surge in memory chip prices, a critical component for modern mobile devices, potentially impacting sales across the sector.
The new devices are Xiaomi’s premium offerings, designed to compete directly with established giants like Samsung and Apple in the lucrative high-end smartphone market. Despite the significant increase in memory chip costs, Xiaomi has opted to maintain the launch prices of the Xiaomi 17 and 17 Ultra at the same levels as their predecessors. The Xiaomi 17 is priced starting at 999 euros (approximately $1,179), while the more advanced 17 Ultra begins at 1,499 euros.
This decision is particularly noteworthy given the sharp rise in memory chip prices, which have reportedly climbed between 80% and 90% in the first quarter of this year. Counterpoint Research attributes this surge primarily to a supply shortage, with demand being diverted to data centers powering the artificial intelligence revolution. Memory components represent a substantial cost in smartphone manufacturing, and Gartner had previously forecasted a potential 13% increase in overall smartphone prices for 2026 due to such pressures. IDC, meanwhile, anticipates a more significant contraction of 12.9% in the global smartphone market for the same year, directly linked to the ongoing chip crunch.
Industry analysts suggest that companies with a stronger presence in the premium segment may be better positioned to absorb these rising costs, as higher-margin sales can offset increased component expenses. However, Xiaomi’s market strategy, where a substantial portion of its sales volume originates from mid-range devices, could present a challenge. A price increase in this segment might deter price-sensitive consumers, and the sales of their high-end devices may not be sufficient to fully compensate for potential losses in the mid-tier market.
Francisco Jeronimo, a vice president for data and analytics at IDC, commented on the situation, noting that “This year will be even worse because Xiaomi does not have a very strong premium share, which means they cannot rely on the premium segment to offset low margins in other devices like Apple and Samsung can.” This sentiment was echoed by Xiaomi’s own management, who had previously cautioned in November about the likelihood of industry-wide price hikes for smartphones in 2026. Ben Wood, chief analyst at CCS Insight, also anticipates that Xiaomi might be compelled to increase prices for its lower-to-mid-tier models.
While consumer electronics remain a core revenue driver for Xiaomi, the company has been making significant strategic investments in its electric vehicle (EV) business, particularly in China. This burgeoning sector now accounts for approximately a quarter of Xiaomi’s total sales and has emerged as a crucial revenue stream, offering a degree of insulation against the volatility in the memory chip market. Recent financial reports for the September quarter indicated a 3% year-on-year decline in smartphone revenue for Xiaomi, while its electric car division experienced a remarkable surge in sales, growing by nearly 200%. This diversification into the automotive sector could prove vital as the company navigates the complexities of the global semiconductor supply chain.
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