Xiaomi President Lu Weibing: Smartphone Supply Chain Prices to Decline in Q4, Boosting Xiaomi's Gross Margin

Xiaomi President Lu Weibing: Smartphone Supply Chain Prices to Decline in Q4, Boosting Xiaomi's Gross MarginXiaomi Group President, Head of the Mobile Phone Department, and General Manager of Xiaomi Brand, Lu Weibing, recently revealed important information regarding the price trends of the smartphone supply chain during an earnings conference. He stated that while smartphone supply chain prices had continuously risen in the first two quarters, peaking in the third quarter, this trend is expected to reverse in the fourth quarter, with prices falling

Xiaomi President Lu Weibing: Smartphone Supply Chain Prices to Decline in Q4, Boosting Xiaomi's Gross Margin

Xiaomi Group President, Head of the Mobile Phone Department, and General Manager of Xiaomi Brand, Lu Weibing, recently revealed important information regarding the price trends of the smartphone supply chain during an earnings conference. He stated that while smartphone supply chain prices had continuously risen in the first two quarters, peaking in the third quarter, this trend is expected to reverse in the fourth quarter, with prices falling.

This statement offers a positive signal to the market. For a long time, global chip shortages and inflation have driven up the cost of the smartphone supply chain, severely squeezing the profit margins of phone manufacturers. Many brands have had to raise product prices to cope with the cost pressure, impacting consumer purchasing power.

Lu Weibing's prediction suggests a positive development for the industry. The decline in supply chain prices will directly lower the production costs for smartphone manufacturers, leading to greater profit margins. This is undoubtedly positive news for Xiaomi, a leading global smartphone manufacturer which has been facing significant cost pressures. Lower supply chain prices will help Xiaomi enhance its product competitiveness and better navigate market competition.

Lu Weibing emphasized that the fluctuations in supply chain prices are within Xiaomi's control. This implies that Xiaomi has proactively prepared for price volatility and implemented measures to ensure the stability of its production and operations, demonstrating strong risk management and supply chain management capabilities.

Lu Weibing also expressed optimism regarding Xiaomi's smartphone gross margin in Q4. He believes that with the decline in supply chain prices, Xiaomi's smartphone gross margin will improve in Q4, enhancing profitability and further strengthening its position in the smartphone market.

This prediction is not unfounded. The global chip shortage is gradually easing, and the supply of some key components is stabilizing, laying the foundation for lower supply chain prices. Furthermore, inflationary pressures are easing in some countries and regions, contributing to lower supply chain costs.

In conclusion, Lu Weibing's prediction of a decline in smartphone supply chain prices offers new hope for the industry. This is beneficial not only to Xiaomi but also to the entire smartphone sector. As supply chain prices fall, manufacturers will have more room to improve product competitiveness and offer consumers better value. Xiaomi's positive outlook also makes the market optimistic about the overall performance of the smartphone industry in Q4. While cyclical fluctuations in supply chain prices are normal, Xiaomi's effective response and positive outlook to this fluctuation demonstrate its resilience and ability to adapt to market changes.