What Happened to Xiaomi: 7 Key Brand Challenges in 2023-2026

Why is everyone talking about the “sunset” of Xiaomi?

The last year was a watershed for Xiaomi, a brand that held the second place in global smartphone sales in 2021. Analysts are now recording a 12 percent drop in market share from peaks, and users are complaining en masse about the system lags in MIUI 14, problems with updates and unjustified rise in price of flagships. What happened to the company that once promised “innovation for all”?

The causes of the crisis are multifaceted, from external factors (sanctions against China, falling demand for electronics) to internal errors (supersaturation of lines, controversial solutions in firmware). In this article, we will analyze the 7 key problems of Xiaomi, analyze the official comments of the company and try to predict what awaits the brand in 2026.

1.Sanctions and geopolitics: how Xiaomi came under attack

The main blow to Xiaomi’s business was not competitors, but political decisions, which in May 2023, the company was included in the list of “military companies” in the United States — along with Huawei and DJI.

• 🔴 Prohibition of the supply of American chips (Qualcomm, Broadcom) without special permission
• 🔴 Restrictions for partners using U.S. technology (TSMC, Samsung Foundry)
• 🔴 Exit from markets of countries following US sanctions policy (Japan, Australia, partly EU)

The consequences were not long in coming: the release of Xiaomi 13 Ultra was delayed by 3 months due to problems with the supply of Snapdragon 8 Gen 2, and in the Redmi Note 12 Pro+ had to use the outdated Dimensity 1080 instead of the planned Snapdragon 7+ Gen 2. According to Counterpoint Research, due to sanctions, Xiaomi lost ~$1.8 billion in revenue only in 2023.

⚠️ Warning: If you plan to buy a Xiaomi smartphone in 2026, check the origin of the chipset in specs. Models with MediaTek processors (such as the Redmi Note 13 Pro 5G) come in more stable than devices on Qualcomm, which may be in short supply.

2 MIUI 14: why users are massively refusing updates

MIUI firmware has always been Xiaomi's Achilles heel, but version 14 broke all records. According to PiunikaWeb, the number of complaints against MIUI increased by 230% compared to MIUI 13.

The hidden mechanism of forced updates was particularly outraged by users: many devices automatically downloaded MIUI 14 even when the option in the settings was disabled. In response to a wave of criticism, Xiaomi released MIUI 14.0.5 with “fixes”, but, according to reviews, problems persisted.

Experts attribute the deterioration of software quality to the departure of key developers: in 2022-2023, the MIUI team left 12 leading engineers, including the creator of the theme system Dong Shenkui, and their place was taken by less experienced specialists, which led to an increase in bugs.

3. line saturation: why users are confused in models

In 2023, Xiaomi launched 47 new smartphones, a record for even a company known for its prolific prolific performance, and the logic of the names became completely opaque:

• 📱 Xiaomi 13 and Xiaomi 13 Pro – flagships
• 📱 Xiaomi 13T and Xiaomi 13T Pro are "lightweight flagships" (essentially renamed Redmi K60)
• 📱 Xiaomi 13 Lite – mid-segment
• 📱 Xiaomi Civi 3 is another mid-range segment, but with a focus on selfies
• 📱 POCO F5 and POCO X5 Pro are nearly identical to the Redmi Note 12 Pro+.

This confusion has led users to abandon Xiaomi in favor of more predictable brands like Samsung or Realme, and according to IDC, Xiaomi’s share of the smartphone market in Europe has fallen from 24% in 2021 to 14% in 2023.

Another problem is cannibalization of sales: For example, the Redmi Note 12 Pro+ with the Dimensity 1080 chipset costs almost as much as the Xiaomi 12T with the same processor, but the worst camera.

4. The rise in price of flagships: goodbye, "price-quality"?

Xiaomi’s traditional price-performance advantage has been weakening. Whereas in 2020, the Xiaomi Mi 10 Pro with Snapdragon 865 and 108MP cameras cost ~$700, in 2023, the Xiaomi 13 Ultra with similar characteristics (but a new chipset) rose to $1100+.

• 💰 Samsung Galaxy S23 Ultra – $1,200 (but with better screen and support)
• 💰 OnePlus 11 – $900 (with similar chipset and charging 100W)
• 💰 Realme GT3 — $650 (with the same Snapdragon 8+ Gen 1)

Analysts attribute the rise in price to:

1. Cost growth due to sanctions (alternative chip suppliers are more expensive)
2. Xiaomi wants to become the “Chinese Apple”
3. Inflation in key markets (India, Latin America)

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If you need a Xiaomi flagship at an adequate price, look at the models of the previous generation: Xiaomi 12S Ultra or Xiaomi 12T Pro can be found at a discount of 30-40% without loss of functionality.

Paradoxically, while Xiaomi is raising prices for flagships, the budget models (Redmi A2, POCO C50) are getting too cheap – with savings on everything, including build quality, leading to a loss of loyalty in both segments.

5. Problems with maintenance

According to the portal 4PDA, the time of repair of Xiaomi smartphones in official centers increased from 5-7 days in 2021 to 14-21 days in 2023.

• 🛠️ Shortage of spare parts (especially displays for Xiaomi 13 and Redmi Note 12)
• 🛠️ Closing 30% of service centers in Europe due to loss
• 🛠️ Refusal of warranty repairs for “unofficial” firmware (even if the problem is hardware)

The situation is aggravated by the policy of “planned obsolescence”: many models cease to receive security updates 2 years after release (for example, the Redmi Note 10 Pro received the last patch in March 2023, despite the promised 3 years of support).

⚠️ Warning: Before buying Xiaomi, check the date of the last security update for the model on the MIUI Forum website. If more than 6 months have passed, there is a high risk that support will soon cease.

Xiaomi announced its “Mi Care+” program, an extended warranty for an additional fee, in response to criticism, but users were cold: according to a survey by XDA Developers, only 8% of Xiaomi owners are willing to pay for something that used to be free.

6.Competition with domestic Chinese brands

If before Xiaomi competed mainly with Samsung and Apple, today the main rivals are Chinese brands of the second tier, which offer similar characteristics cheaper:

The key difference between these brands and Xiaomi:

1. More aggressive marketing (e.g. Realme is actively working with bloggers)
2. Best localization (firmware adapted for regions, no "Chinese crutches")
3. Fast updates (e.g. Oppo promises 4 years of support for flagships)

Xiaomi is trying to meet the challenge: in 2026, the company announced a new strategy:

• 📉 Reduce the number of models by 30%
• 🔄 Quality Improvement MIUI (Special Department QA)
• 💡 Ecosystem focus (smart home, wearable electronics)

But the results of these changes will not be visible until 2026.

7.The future of Xiaomi: what to expect in 2026-2026?

Despite the problems, Xiaomi has a trump card:

• 🚀 Leadership in the smart home segment (35% of the global market according to IoT Analytics)
• 🚀 Developing custom chipsets (e.g. Surge G1 for wearable electronics)
• 🚀 Expansion to Latin America and Africa (sales growth of 18% in 2023)

Canalys predicts that Xiaomi could recapture 18-20% of the global market by 2026 if:

1. Stabilizes the quality of MIUI (especially for budget models)
2. Transparent Update Policy (minimum 3 years of support for all devices)
3. Focus on 3-4 key lines instead of 10+

The first steps in this direction have already been made: in January, the 2026 of the year Xiaomi introduced the Xiaomi 14 with the promise of 4 years of Android updates and 5 years of security patches – a record for the brand. The company also announced the Xiaomi SU7 – its first electric car, which can become a new growth point.

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Xiaomi is at a crossroads: either the brand will return to its roots (affordable innovation) or finally transform into a premium manufacturer with a focus on the ecosystem. 2026 will be decisive.

FAQ: Frequent questions about Xiaomi's problems