In the past two years, Internet users have increasingly wondered what happened to the once-people’s brand? The company that became famous for its “top iron at the lowest price” slogan has radically changed its direction. Instead of affordable flagships with a mara of $ 300, devices with price tags confidently exceeding the psychological mark of 1000 euros are appearing on store shelves. The strategic reversal of the giant from Beijing has come as a shock to millions of ecosystem fans accustomed to maximum savings.
Many believe that the brand is just “presumed,” but behind the exterior lurks deep economic and technological processes. Xiaomi Corporation faced the need to survive in the face of fierce competition and sanctions. The key factor in the change was the company’s decision to invest huge resources in the development of its own chips and the automotive industry, which required a sharp increase in the margins of smartphones.
In this article, we'll go into the root causes of the metamorphosis, look at software issues, and try to understand whether budget devices have a place in the new reality. Market analytics shows that the changes have affected not only pricing, but also build quality and software support. Let's work together to understand where the ship is headed under Lei Jun.
Economic reasons for price growth and change of positioning
The first thing that catches your eye when you visit an official store or electronics retailer is the cost of new products. If Xiaomi used to be synonymous with accessibility, now the flagship Mi and Xiaomi lines (without the Mi console) compete in price with Samsung and Apple. The era of ultra-cheap smartphones with top-end processors is a thing of the past, and this is due to the global rise in the price of components, especially displays and memory modules, but not only.
The company has made a conscious decision to exit the low-margin segment, selling devices at a margin of 5% is no longer acceptable to shareholders, especially as it needs to finance risky projects. Investment in R&D (research and development) requires huge infusions. Now the brand is looking to capture the premium segment, where profits on one sold gadget can reach 30-40%.
Moreover, inflation and exchange rate fluctuations in China have a direct impact on the final value of goods, and the logistic chains built over the years have been disrupted, which have also added costs, and production facilities have to be upgraded by introducing robotic lines that are also priced in the product price.
- 📈 The sharp rise in price of the flagship processors Snapdragon and Dimensity of the latest generations.
- 💸 Component inflation: matrices AMOLED And memory modules went up in price. 20-30%.
- 🏗️ Costs of construction of new plants and research centers.
- 💰 Aspiration to increase net profit to cover losses of related businesses.
It’s important to understand that cheap models haven’t gone away, they’ve just been taken into a separate sub-brand. Redmi and POCO have now taken over the full niche of budget and mid-budget solutions. Xiaomi’s core brand is being relegated to the role of a luxury device maker competing with the industry’s best.
Software problems and the transition to HyperOS
One of the most painful topics for the community was the software part. MIUI It was considered one of the most functional, but it was overrun with bugs and advertising, and in response to criticism and to unify the ecosystem, the decision was made to create its own operating system HyperOS.
The new system is based on deep reworking of the Android kernel and proprietary Xiaomi components. However, the first releases were not as smooth as we would like. Users faced unstable background processes, problems with notifications and unexpected reboots. Code optimization takes time, and early versions of the software are often mistaken.
⚠️ Warning: Before upgrading to HyperOS, make sure to back up your data completely.The migration process can lead to loss of contacts and messages if you do not use a cloud service or local backup on your PC.
In addition to technical bugs, many users were frustrated by the change in interface and logic of the usual functions: some settings were hidden or moved to the depths of the menu, energy saving algorithms became more aggressive, which sometimes leads to incorrect messengers. The company promises to fix the main shortcomings within a year, but the sludge remained.
Why is HyperOS heavier than MIUI?
While some models have received Android updates for 3-4 years, now priority is given to new flagships, support for budget devices is reduced, which forces users to change gadgets more often.
Transformation of the model range: Redmi and POCO
To answer the question, "What happened to the shaomi," you need to look at the branding structure. The company has done a clear zoning. Xiaomi's core brand is technology, premium materials and innovation. Redmi is a mass market, a balance of price and quality. POCO is performance for enthusiasts and gamers.
While Xiaomi’s flagships are struggling for status, the Redmi Note continues to be a bestseller in its segment, but there is also a noticeable rise in prices. The POCO flagship killers have also risen in price as the cost of the top-end MediaTek and Snapdragon 8 series chipsets has increased.
New categories of devices have emerged in the lineup: foldable smartphones (Mix Fold), transparent devices, experimental form factors, all of which are now part of the brand's DNA, and innovation requires money that comes from mass-market devices.
| Brand | Target audience | Price segment | Key feature |
|---|---|---|---|
| Xiaomi | Business, enthusiasts | Premium ($800+) | The best cameras, materials, innovations |
| Redmi | Mass user | Budget/Average ($150-$500) | Balance of price and functionality |
| POCO | Gamers, techies. | Medium/High ($300-$700) | Maximum productivity |
| Black Shark | Gamers (partner) | High ($600+) | Active cooling systems |
So the brand hasn't disappeared, it's just become multi-level. The one-brand-for-all strategy has been ineffective in a saturated market. Now each sub-brand has its own distinct identity and marketing strategy.
The impact of the Xiaomi Auto car project
One cannot ignore what has become perhaps the most significant factor in the company’s history: Lei Jun announced that the creation of the Xiaomi SU7 car will be his “last battle.” The car project has absorbed billions of dollars in investments that could go to make smartphones cheaper.
The success or failure of this will determine the future of the entire company, and the car must become the center of the new human-car-home ecosystem, and the smartphone acts as the key and the remote control, which is why integrating devices becomes the number one priority.
💡
If you are planning to buy a Xiaomi car, make sure your smartphone supports the latest version of HyperOS for the full integration of digital key and climate management features.
Critics point out that the car market is oversaturated and marginalized, but Xiaomi is betting on its smart home technology and loyal audiences. The ecosystem is what keeps the user inside the brand, even if smartphones go up.
Investment in the auto industry has already taken a toll on the mobile budget, with resources being redistributed, and the mobile division having to generate cache to support the car, a temporary but necessary sacrifice to scale the business.
Geopolitics and Sanctions Pressure
Global affairs have also played a role, with Chinese tech giants under scrutiny from Western regulators, and sanctions and restrictions on the supply of advanced chip-making equipment are creating additional difficulties.
Companies have to work around the world, build their own supply chains, and stock up on components for the future, all of which are logistical and legal costs for the end user, and global smartphone versions can now differ from Chinese versions not only in their frequency set, but also in their lack of features due to licensing restrictions.
⚠️ Note: When buying Xiaomi smartphones imported by parallel import, you may face a lack of warranty and the inability to use some banking applications (NFC-pay).
In addition, the brand seeks to diversify its markets less depending on one region; strong growth in Europe, India and Latin America requires different marketing approaches and product adaptations, which also cost money; and localization of software and services is a continuous process that requires a staff of developers.
Brand Perspectives: Should We Expect a Return to Origins?
Many users are hoping that after the acute phase of the car project and the stabilization of the market for components, prices will fall again, but experts are inclined to believe that the past will not be returned.
Xiaomi no longer wants to be a 'cheap China' manufacturer: The company's ambition is to enter the top-3 The world's manufacturers are making money, not just shipping, and it requires high-priced work, and it's getting more expensive to develop, and that's an objective reality.
☑️ What to look for when choosing Xiaomi in 2026
But the quality of the products has gone up: Metal frames, IP68 water protection, Leica-enabled cameras are not dreams anymore, but the standard for the brand's flagships, and the consumer gets a better product, but pays the full price for it.
On the bottom line, what happened to the shiomi is what happens to all successful companies -- they've grown, they've outgrown the people's brand and become a big-business corporation, and the budget segment has remained, but it's clearly separated and doesn't claim to be a technology leader.
💡
Xiaomi is no longer a brand of exceptionally cheap phones; it is a technology corporation where smartphones are just part of a large ecosystem of smart devices and transportation.