Xiaomi CEO Lei Jun confirmed that the company is “doubling down” on a vertically integrated strategy, pledging to invest 200 billion yuan (approx. $28 billion) over the next five years in core technologies.
The goal is to achieve total self-reliance by integrating in-house chips, a native operating system, and proprietary AI models into a single hardware stack—essentially positioning Xiaomi as the “Apple of the Android world.”
1. Semiconductors: The XRing O1 Breakthrough
Xiaomi is moving away from its heavy reliance on Qualcomm and MediaTek.
- The XRing O1 Chip: Xiaomi’s first major in-house flagship processor is built on a 3-nanometer (3nm) process. It features 19 billion transistors, matching the scale of Apple’s A18 series.
- Vertical Integration: Lei Jun announced plans for a 2026 flagship smartphone that will be the first to feature the XRing O1, fully optimized for Xiaomi’s own software and AI models.
- Financial Commitment: This follows an initial 50 billion yuan investment plan specifically for high-end smartphone chips, backed by a team of over 2,500 semiconductor engineers.
2. Software: The Rise of HyperOS 3
Xiaomi is aggressively transitioning from “Android with a skin” to a unified, multi-platform ecosystem.
- HyperOS 3: Released in late 2025, this version has completely unified the software architecture across smartphones, IoT devices, and EVs.
- Cross-Device Interconnectivity: A key update in early 2026 introduced “HyperIsland” (similar to Dynamic Island) and, for the first time, seamless cross-device interconnectivity with Apple devices to lure premium users.
- Long-Term Support: As part of a “Value-for-Experience” pivot, Xiaomi now promises 4 years of OS updates and 6 years of security patches for its mid-to-high-range devices.
3. AI: The MiMo Ecosystem
Rather than just adding “AI filters,” Xiaomi is building a “General Purpose” AI infrastructure.
- MiMo Large Models: Xiaomi has open-sourced its MiMo-V2-Flash model (309 billion parameters), claiming inference speeds that outperform global competitors while keeping costs as low as $0.1 per million tokens.
- Agentic AI Features: The 2026 roadmap includes “Super Xiao Ai,” a multimodal assistant that can perform on-device text-to-image generation, real-time “Random Photo Editing” via voice, and automated cross-app tasks.
- On-Device Privacy: A major focus is “local-first” AI, where sensitive tasks (like AI search and album editing) are processed on the device rather than the cloud to ensure user privacy.
4. India Strategy: “Value-for-Experience”
In India, Xiaomi is shifting from being a volume-driven “budget” player to a premium ecosystem brand.
- Premium Service Expansion: On February 26, 2026, Xiaomi India announced the expansion of its Premium Service Centres to 15 new cities (totaling 25), with a goal of reaching 100 centres nationwide.
- Local Manufacturing: Nearly 100% of smartphones and smart TVs sold in India are now made locally, with non-phone categories (tablets and wearables) reaching 90% localization in early 2026.
- Eco-System Revenue: Non-smartphone products (TVs, tablets, vacuum robots) now contribute 15% to 20% of Xiaomi India’s total revenue.
The “Grand Convergence” Target
| Sector | Goal for 2026-2027 |
| Chips | Commercial rollout of XRING O2 (next-gen 3nm). |
| AI | Transition from “Assistive AI” to “Embodied AI” (for robotics). |
| Business | Marginal profitability for the EV segment (targeting 500,000 units). |
| Strategy | Become a “Hardcore Tech Company” on par with Apple and Huawei. |
