Ladies and gentlemen, welcome to Xiaomi's 2025 First Quarter Results Announcement, Investor Conference Call, and audio webcast. Today's conference is being recorded. If you have any objection, you may disconnect at this time. If you have any question and would like to raise during the Q&A session later, please press star one on your telephone keypad to register your question. Should you wish to cancel your question, please press star two. Now, I would like to hand the conference over to your host today, Mr. Xiao Ran, General Manager of Group Investor Relations. Please go ahead, sir.
Good evening, ladies and gentlemen. Welcome to the investor conference call and audio webcast hosted by Xiaomi Corporation regarding the company's 2025 first quarter results.
Before we start the call, we would like to remind you that this call may include forward-looking statements, which are underlined by a number of risks and uncertainties, and may not be realized in the future for various reasons. Information about general market conditions comes from a variety of sources outside of Xiaomi. This presentation also contains some unedited non-IFRS, financial measures that should be considered in addition to, but not as a substitute for, the company's financials prepared in accordance with IFRS. Joining us on the conference today are Mr. Lu Weibing, Partner and President of Xiaomi Corporation, and Mr. Alain Lam, Vice President and CFO of Xiaomi Corporation. To start, Mr. Lu, will share recent strategic and business updates of the company. Thereafter, Mr. Lam, will review the company's financial performance in the first quarter of 2025. Following that, we'll move on to the Q&A session.
I will now turn the call over to Mr. Lu.
Good evening, everyone. Thank you, and welcome to Xiaomi's Q1 2025 Results Announcement Conference Call. This year is the 15th anniversary of Xiaomi's founding, and also the beginning of our new five-year journey. In the first quarter just passed, under the traction of the overall strategy of people, car, home, and ecology, we have steadily pushed forward the various strategies of our group. Various business lines have achieved multi-point blossoming, creating another record. We have delivered a single quarterly , financial report that is the strongest in our history. Tonight, I would like to share with you two main points. First, talk about the milestones we've achieved in hardcore technology, including the breakthrough of X-Ring processor, released last week and the progress of the AI big model.
Second, I'd like to share with you the highlights of our first quarter results, and latest progress in executing our strategy. As you know, our development goal for the new decade is to invest massively in the underlying core technology, and become the next generation of global hardcore technology leader. Based on this goal, we have adhered to technology-based principles. At the beginning of the year, we announced that our R&D investment, in 2025, should reach CNY 30 billion, which means that our R&D investment, in the five years from 2021 to 2025, should exceed CNY 102 billion. Last Thursday, Mr. Lei, announced a new five-year R&D investment, target for the next five years. That is, from 2026 to 2030, R&D investment, is expected to reach CNY 200 billion. These R&D investments, will help Xiaomi, turn hardcore technology into a corporate mode.
In the field of hardcore technology, AI and chips, are important underlying core technologies, and there are also two very important sub-strategies of our Xiaomi group. We have recently shown you our latest R&D achievements, in these two fields. In the field of AI, we continue to promote research of large model of the base. At the end of April, the Xiaomi, big model core team, released Xiaomi's open-source, first big model for reasoning Xiaomi MiMo, which, with a parameter size of only 7B, has achieved excellent results in the open test set of mathematical inference and code competitions. In the field of chips, last Thursday, we delivered the first report. Xiaomi's, first independently developed and designed a three-nanometer flagship cell phone SoC chip, Xiaomi X-Ring 01, was officially released.
Using second generation of three-nanometer process, with 19 billion transistors, the performance and experience, are in the first echelon, of the global industry. X-Ring 01, adopts the advanced 10-core four-cluster architecture, and the AnTuTu score, reached more than 3 million points, while energy consumption performance, is also very good. Currently, the X-Ring 01, is installed in our flagship smartphone, Xiaomi 15S Pro, as well as our highest-end tablet, Xiaomi Tablet 7 Ultra. In addition to the release of X-Ring 01 processor chip, that you have already seen, we also released Xiaomi's, first long-lasting 4G watch chip, X-Ring T1, at the same time. X-Ring T1, internal integration of Xiaomi's, first self-research 4G baseband, representing Xiaomi, in the baseband of this key track, has taken an important step forward.
For scale of investment, in the chip sector, when we decided to relaunch big chips in 2021, we set out a plan for long-term investment. At least for the coming 10 years, we should at least invest at least CNY 50 billion. Over the past four years, starting 2021, as of the end of April this year, X-Ring's, cumulative investment in R&D, has exceeded CNY 13.5 billion. At present, the size of our R&D team, in the chips division, has exceeded 2,500 people. Number of persons, and the scale of investment rank, top three in China. We believe in the future, chips will be the core track for Xiaomi, to break through hardcore technology. We'll do our best to maintain strategic patience and continue to invest in them. Let's now share with you some highlights of our first quarter results. In Q1 2025, keyword for our results was record high.
Our total revenue, core business revenue, adjusted net profit, and many other metrics all reached record high in a single quarter. Total revenue of CNY 111.3 billion, up 47%, year-on-year for a second consecutive quarter. For cell phone business, CNY 92.7 billion, up 23%, year-on-year. A single quarter, adjusted net profit exceeded CNY 10 billion, for the first time, reaching CNY 10.7 billion, up 64%, year-on-year. I would like to highlight some of the key business results we achieved during the quarter. First, after a decade, we returned to number one in smartphone shipments in mainland China. In Q1 just passed, we returned to number one in smartphone shipments in mainland China, increasing our share by 4.7 percentage points, year-on-year to 18.8%, thanks to the continuous improvement of our brand and product strength and the solid new retail foundation we have built over the past few years.
For five consecutive quarters, we exhibited growth. Our shipment growth rate in the first quarter, reached 40%, year-on-year, fastest among the top five vendors, significantly outperforming the 4.6%, year-on-year growth rate, of the broader smartphone market, in mainland China. We continue to promote premiumization strategy. In Q1, our global smartphone ASP, hit a record high of RMB 1,211, up 5.8%, year-on-year. In Q1 2025, Xiaomi's share, of high-end smartphone shipment in mainland China, increased from 21%, in the same period last year to 25%, an increase of 3.3 percentage points. Flagship phone Xiaomi 15 Ultra, saw a year-over-year increase of more than 90%, in first sales month in mainland China, shipment compared to predecessor. At the same time, we continued to increase the proportion of high-end users, which contributed to our record internet revenue in mainland. For channel expansion, we actively promoted the construction of new retail channels.
In terms of channel expansion, we actively promoted the construction of new retail channels, adding more than 1,000 Mi Home stores, to approximately 60,000 in Mainland China, in Q1, expanding automotive stores to 235, and continued to enhance wider user reach and realize ultimate user experience with extreme efficiency. In Q1, smartphone market share, in offline channels in Mainland China, increased to 12.1%, up 3.2 percentage points, year-on-year. IoT revenue, continued to reach record high, driven by strong growth in multiple IoT categories. Thanks to our breakthrough in technology, product brands, channels, and services, coupled with favorable national subsidy policy, our IoT revenue, reached RMB 32.3 billion, in Q1, exceeding RMB 30 billion, for the second consecutive quarter, with strong year-on-year revenue growth of 59%. We achieved breakthrough in a number of categories, focusing on our major large home appliances, tablets, and wearable businesses, which achieved good results this quarter.
We are all very concerned about big home appliance business. We set high targets, and by 2030, for the mainland market, we want to be one of the top two. This year, in Mainland China, open market sales, we target at number three. We have completed comprehensive technology benchmarking, and we need to enhance our product capability. Our smart manufacturer, and factory will start production this year, thanks to enhancement of our multifaceted capabilities in Q1. Revenue, of large home appliance business doubled year-on-year with shipments of air conditioners, refrigerators, and washing machines, all achieving high growth rates of more than 65%. ASP, increased significantly. Product mix improved significantly. For tablets, relying on our improved product portfolio, our tablet product shipment hit a record high in Q1 and entered top three globally, for the first time, with shipment growing 56%, year-on-year, fastest growth rates among top five vendors.
Last Thursday, we announced Xiaomi Tablet 7 Ultra, equipped with the X-Ring 01, which is the first time that Xiaomi Tablet, has launched the Ultra series, meaning that it will have top-quality technical specifications and experience. This is also the first shot at Xiaomi tablets premiumization. For wearables, our wearable wristband achieved number one position globally in Q1. Last Thursday, we announced the Xiaomi Watch S4, eSIM ,15th anniversary edition, powered by our X-Ring T1 chip, which improves performance while significantly reducing power consumption. In Q1, we ranked second globally in TWS shipment, with 63%, year-on-year increase. We ranked first in China, with 44%, year-on-year increase in shipment. Third, EV business, continued to grow at rapid rates. We continue to tap into production efficiency and increase production capacity, delivering 76,000 new EVs, in the first quarter.
As we shared last Thursday, Xiaomi, has delivered more than 258,000 units, of the SU7 series, and more than 28,000 units, were delivered in April, making it the top seller of all cars in the 200,000-plus price range. Last Thursday, the long-awaited Xiaomi U7, was also officially unveiled. Positioned as a luxury high-performance SUV, the Xiaomi U7, boasts elegant styling and sporty high performance, while also offering an overall sense of luxury and spatial comfort. The Xiaomi U7, is equipped with a full range of configuration, a full range of ultra long range. Standard version of the range is up to 835 km, also equipped with a standard 800V silicon carbide high voltage platform, Xiaomi's panoramic sky screen, as well as a full range of standard LIDAR, 700-tops auxiliary driving, arithmetic, and continuous damping vehicle dampers, variable dampers.
Xiaomi U7, has a fully upgraded armor cage steel aluminum hybrid body, which is the first to be equipped with 2,200 MPA, Xiaomi Ultra Strong Steel, has passed more than 50 passive safety performance development tests, and there are three versions, Standard, Pro, and Max, which will be officially launched in July, this year. In conclusion, I would like to say that Xiaomi, is standing at a new starting point of a new journey, and although the road ahead is far, there will be countless challenges and difficulties, but we will do our best. We firmly believe that Xiaomi's, values, our model, our methodology are powerful and universal, and we firmly believe that as long as we start to catch up, we are on the way to win. That's what I'd like to share with you today. Next, let me turn the floor over to Alain, our CFO.
Thank you, Mr. Lu. Good evening, everyone. As Mr. Lu just shared with you, in 2025 Q1, with our people, EV, home, ecology, strategic guidance, once again, we have achieved very good results performance. Our total revenue, core business revenue, gross margin, adjusted net profit, all these metrics have achieved historical record high. In Q1 2025, we achieved total revenue, of RMB 111.3 billion, up 47.4%, year-on-year. Gross margin, was 22.8%, reaching a record high in history, up 0.5 percentage point year-on-year. Looking at our different segments, first, our smartphone times AIoT, segment revenue was RMB 92.7 billion, up 22.8%, year-on-year. Gross margin, 22.8%, a historical high level, up 0.5 percentage point, year-on-year. Now, let's take a look at different business segments. First, smartphone. In this quarter, revenue, was RMB 50.6 billion, accounting for 45.5% of total revenue, up 8.9%, year-on-year.
In this quarter, our global smartphone shipment was 41.8 million units. For seven consecutive quarters, we achieved year-on-year growth in shipments. According to Canalys data, in this quarter, our global smartphone shipment ranked number three. Market share was 14.1%. For 19 consecutive quarters, we are within top three in the world. At the same time, in 58 markets, in the world, we are within top three. In global 68 markets, we are within top five. In Q1, our smartphone gross margin, was at a healthy level. Smartphone gross margin, in the last quarter was 12%. It rose to 12.4%, in this quarter. This quarter, our smartphone ASP, reached RMB 1,211, up 5.8%, year-on-year. Again, a historical high level. According to Canalys data, in Q1 2025, in Mainland China, our smartphone shipments came first, and our market share was 18.8%. Shipments grew 40%, year-on-year. Our performance far surpassed the overall industry.
For IoT, in Q1, our IoT business achieved breakthrough in both revenue and profits. IoT revenue and gross margin recorded historical high level. In this quarter, our IoT revenue was RMB 32.3 billion, up 58.7%. Our IoT business gross margin, reached 25.2%, significantly improved by 5.4 percentage points. For internet, we continue to expand our user scale. In March 2025, our global MAU number, reached 719 million, up 9.2%, year-on-year, of which in mainland China, MAU number, reached 181 million, up 12.9% or 13%. In Q1 2025, our internet service business revenue, was RMB 9.1 billion, up 12.8%, year-on-year, of which our mainland China, internet revenue, reached a historical high level, up almost 15%, year-on-year to RMB 6.4 billion. Internet gross margin, continued to improve. This quarter, gross margin, reached 76.9%, up 2.7 percentage points, year-on-year. Our advertising business continued to drive our internet business growth.
This quarter, our advertising revenue was CNY 6.6 billion, up 19.7%, year-on-year. AI strategy, is our very important strategy. Since Q1 2025, our smart EV, and related innovative business segment will be renamed as smart EV and AI innovative businesses. We will increase AI-related investment, which will be incorporated into the new business. In Q1, our smart EV, and AI innovative business segment, had revenue of CNY 18.6 billion, accounting for 16.7%, of total revenue, of which smart EV, sales reached CNY 18.1 billion. Other related business revenue was CNY 500 million. Consolidated GEP margin, 23.2%. This quarter, Xiaomi SU7 series, altogether 75,869 units, have been delivered, and ASP, was CNY 238,301. For our new business operating loss, it continued to narrow. This quarter, smart EV and AI innovative business operating loss, was CNY 500 million.
Larger scale investment, into bottom layer core technology and to become new generation global hardcore technology leader. This is our 10-year goal. New 10-year goal, will continue to enhance our R&D investment, and technology innovation strength to build our long-term technology moat. In Q1 2025, R&D expenses, reached CNY 6.7 billion, up 30%, year-on-year. As of 31 March 2025, our number of R&D, people reached 21,731, reaching a historical record. While we promote R&D innovation, for expense control, we continue to be highly effective. In Q1 2025, our overall operating expenses, totaled CNY 15.4 billion. If we exclude new business investment of CNY 4.8 billion, our core business operating expenses amounted to CNY 10.6 billion. Expense ratio was 11.4%, down 1.4 percentage points, year-on-year.
For profit, our single quarter, adjusted net profit, for the first time exceeded CNY 10 billion, reaching CNY 10.7 billion, creating a historical record, and it is up 64.5%, year-on-year. Adjusted net profit margin also reached a new record high at 9.6%. For ESG, in April 2025, for consecutive seven years, we published Xiaomi Group's ESG reports. We reported on our 2024, work in Xiaomi, concerning low carbon transformation, circular economy, sustainable supply chain, talent development, and corporate governance strategies, and results and outcomes. We plan that in 2022 to 2026, in these five years, total volume of recovery should reach 38,000 tons of electronic waste. Right now, we have already completed 95.94% of this target, and we actively lead industrial chain working partners towards green transformation. In order to continue to lower scope three emission, we have set two goals.
First, by 2030, for smartphone business suppliers, their annual average carbon emission comparing with 2024, should not be lower than 5%. For usage of green power, it should not be lower than 25%. Number two, by 2050, smartphone business suppliers' green power utilization ratio, should reach 100%. Besides, the Ministry of Industry and Information published the 2024 Green Manufacturers List, and we successfully were included in the list of green supplier chain management enterprises. This shows that in promoting industrial chain green transformation, and the geocarbon target achievements, we were recognized by the authority. In the future, we will continue to promote various strategies of our group. We will continue to enhance the building of our bottom layer building and management system reform. We will move towards higher targets and goals. Thank you all. The above is the presentation that I would like to share with you tonight.
Now we can start our Q&A session.
Thank you, Alain. Now we'll move on to Q&A. In order to enable more investors to ask questions, can you please limit the number of questions to two at most? Thank you. Thank you. Now we will start Q&A session. If you want to ask questions, please press star one on your phone keypad. If you want to cancel your question, please press star two. Thank you. First question is from Morgan Stanley, Andy. Please go ahead.
Thank you, host. Congratulations, Xiaomi, for the best quarterly results in history. I have two questions. First question about your AIoT business. In Q1, in this segment, you achieved very rapid growth. The pace is much faster than the average growth rate, in the industry. Investors have seen this, and also your competitors have also paid attention to that.
Recent research, shows that some of your peers have already formulated plans to target Xiaomi. In the future, IoT competitive landscape, will be more intense. What strategies will you put in place to face up to the situation? Will there be different tactics between China and overseas? The second question is about EV. After the technology launch, some investors said to me that they are worried that the EV, will sell well, but then there will be impact on data sales, and that would be lowering in price in order to promote sales. What do you think? How can you make sure, or what strategies can you put in place to ensure that you will achieve your expectation?
Right. Thank you. You said that some peers have formulated strategies in relation to our products.
I think we are still in a high growth stage, and there are many products that are out of stock. For example, when the peak season of air conditioner, is approaching, we are worried about production capacity, so we have not felt our competitors' impact on us. If we have aroused attention from our competitors, I think this is good for the industry. Now, for the home appliance industry, I think it has been too mature and too rigid. Changes have been too slow. In fact, we have seen that there are a number of market behaviors, that are not that good for consumers. For example, some peers for the same product have just changed the model number, and they place them in different channels selling at different prices.
For us, we think that no matter which channels users go to buy the product, they should get the same product and the same right to know, same price. I think development or evolution has been too slow on user dimension. There has been some negative phenomenon. If what we have done had aroused improvement in the peers, then this is something good. For the industry, we hope that we can become a value creator in the industry and also a promoter of industrial improvement. I think for me, I do not think there has been much impact on Xiaomi. Today, in the large appliance business, I think we have not reached a satisfactory level so far. If you look at our strategies, we started in 2023. We have only spent one and a half years or so time.
Internally, we believe that there is still much room for improvement. Today, I am thinking of building our large appliance factories. For example, when should we build the refrigerator factory? We have still not reached many breakthroughs. There are a lot of things that we have still not finished. For large appliance, high growth, I think that is just a start. For overseas, I do not think there would be a big difference with the tactics in China. Of course, the overseas share may not be as high, but I do not think there is too much difference. There will be difference in the competitive landscape, but 80%, of the home appliances, are Japanese brands, not Chinese brands. I think the competitors will change. For user demand, there is not a fundamental change.
I think there is a difference in purchasing power, leading to change in the product demand, but that is not an intrinsic difference in the users. For SU7, for the impact on SU7, I think first of all, I do not worry at all that the sales of SU7, will be impacted, that price has to be reduced. I think capacity is very significantly inadequate. For SU7, I think the biggest advantage is that capacity replication or replicability is very high. For SU7, for these two models, what kind of ratio will they constitute? We do not know yet. I think after launch for some time, after the situation normalizes, then we will know the reasonable ratio between the two models.
Okay. Thank you, Mr. Lu. Very helpful.
Thank you.
Thank you. Next question is from Citi. Yiying Bang, please go ahead. Thank you.
Congratulations, management, for the excellent results. I have two questions. One, recently we read the news for smart factory and also smart home appliance factories. In the future, for IoT plan, product plan, apart from product plan, can you talk about the smart appliance factory and also smart EV factory? In terms of efficiency and profitability enhancement, how much help will they do? That's my first question. Let me raise the second question as well. Now, looking at the expectation for LIDAR, and also the safety equipment, they are in the standard configuration. This is good. From a profitability point of view, with such standard configuration, will that affect your pricing strategy and your profitability? Thank you.
Your first question is about the production platform building. I do not know whether my understanding is correct. Yes. We have EV factory, smartphone factory, and home appliance factories.
In the front end, you see different products. In the rear end, you will see how we build our smart manufacturing platform. For these three factories, behind them, a lot of things are about supply chain. For example, our system, Hong Hai system, I think it is the main core, and then there are the core suppliers, which will be shared. I think the overall logic and methodology, they are the same. For smart production or manufacturing, basically, we have already found the commonness among different categories and also the differences as well. When we face the future, I think we are talking about how to globalize, how to go abroad. Basically, we have gone through the initial learning curve. Now for the product strength, we are very strong. We have the standard configuration with long range and also other functionality.
The product is very strong. You asked about pricing and profitability. So far, we have not fixed the pricing yet, so I cannot discuss that with you now. For a not strong enough product capability, it is not possible to have good profitability. Profit is the result. It is not a goal or target to pursue. If your product is strong, then profitability should not be a problem. If we look at SU7, after launch, it is around 14 months, already. Right now, in the market, what other products can catch up? Not even one. I think there were many competitors who tried to use different tactics to fight the battle, but today, there has not been one which can match us. Not even 5%, not even one quarter. You need to have good product strength, and then you will not have competitor.
Without competitor, then you will have the bargaining power and pricing power. Then you can maintain reasonable profit margin. Okay. Thank you, Mr. Lu.
Thank you.
Thank you. Next question. Timothy,, of Goldman Sachs, please.
Thank you. Operator, thank you. Congratulations on your excellent results. I have two questions. First, about your core business that is smartphone times AIoT. I would like to focus on smartphone this year for Xiaomi smartphone shipments and also price outlook. How will that be in Q1 in the global markets? In the overall performance, there is much variance, and there are many variables. In the handset or smartphone business, what are some updates in your strategies? Second question is about EV, AI, and new business. So for EV, gross margin, it's above 23%. And can you analyze the reason behind? In the future, what will be the outlook for the gross margin?
If we look at the new business loss, I do not know whether you can share with us about EV and AI, and other new business like chip investment. How will the level be?
Okay. For smartphone this year, I think that overall speaking, the growth should be different from your expectation at the beginning of the year, especially in the Chinese market. I think this year, there is national subsidy in China. Overall speaking, in the past, people were more optimistic. This year, it seems that the extent is not as big. For product structure, there are changes in mid to high end. For global markets, I think there is just one or two points. There may be even negative growth. In some markets, there was negative growth already.
In Europe, for example, for Xiaomi, in terms of strategies, I do not think there would be much adjustment. When it comes to fine-tuning in the past, for volume growth rates, we are more concerned. For example, in 2024, 2023, we got 20-odd million. This year, given the current situation, we may appropriately relax our requirement on sales volume. We should focus more on improvement of product structure. In the past, we reduced the volume or stopped production of low-end products. As in Japan, in the past, there were many businesses that we did, but now we can stop those. For example, in Hong Kong, we also wanted to focus more on the higher-end business. Xiaomi this year, or last year, 170 million, this year, perhaps around 180 million. Given such volume, I think we need to improve product structure.
That will be more important than enhancing sales volume. Of course, in Africa, we have a market share of like 13%. Given our product and brand strength, I think we can reach 20%, in market share. In other words, in this market, I think there is still big room in Africa. Basically, we have to build a bigger scale. Overall speaking, I do not think there would be big adjustments. That is the first point. The second point is about EV gross margin. Now, starting this quarter, we have disclosed gross margin, for four quarters. In first quarter last year, we disclosed a gross margin, of 15.4%, and then 17.1%, and then 20.4%, and then 23.2%. You can see that every quarter, our gross margin keeps improving steadily. There are a few points. First of all, I think our product strength is strong.
Now for SU7, for some cars, after they are launched, they are being challenged. For us, for single model or bestseller, they would definitely lead to optimization, of course. When we look at volume, we have to look at the single product efficiency under the volume. You do not look at only the total volume. For some cases, there are only scale, but no economies of scale. There are also some bestsellers that you can look at. You should look at efficiency, our internal management efficiency, our expense ratio, and also our channel efficiency. For our efficiency, it may be two to three times the efficiency of traditional automobile companies. At the same retail price in the channels, we have a lot more room. All these added together will lead to the current result.
On the contrary, in the industry, there may be a lot of notes that need to be improved. I think Xiaomi's , data can serve as reference for the industry and help everyone to improve and advance. I think this is the value of Xiaomi in the industry. You talked about loss, the amount of loss. At present, looking at our disclosure and our current way of disclosure, there is still a loss of around RMB 500 million. Let me supplement. You can see that in the past few quarters, for our delivery, it has been rising. Last year, Q2, 27,000, units, Q3, 40,000 units, and in the recent quarter, 70,000 units. Now we have already delivered 75,000 units, in Q1. There is the sharing of fixed costs. In other words, our efficiency will rise, and this is helpful to gross margin. Secondly, as Mr.
Lu said, we sell cars for four months already. We have not lowered price, and there is some equity that is being gradually phased, and then it will lead to enhancement in gross margin. Thirdly, in Q1, we started to deliver our ultra products, which will help our gross margin. Finally, if you look at our peripheral products, last quarter, around CNY 500 million. Since disclosure, this is the highest number in other income. As a result, these have brought help to our gross margin. That's all for me to add.
Thank you, Mr. Lu and Mr. Lam.
Thank you. Next question is from CICC. Please go ahead.
Thank you. Alan, Mr. Lu, good evening. Congratulations on your outstanding results. I have two questions.
First, about premiumization of smartphone in Q1, Xiaomi in the Chinese market, your market share is rising for CNY 4,000 plus, for your 15 Ultra, is selling well. You have the X-Ring SoC model, as well. In the past, in terms of smartphone premiumization, you have been progressing. In the future, what is your plan in this regard? My next question is about AI. In April, you introduced Xiaomi MiMo, first large model. Some time ago, you said that you will increase investment into AI. My question is, in the future for AI smartphone area, what kind of pleasant surprise can we expect or look forward to?
Right, for premiumization. In Q1, we conducted a premiumization seminar. During that seminar, we did two things. We have been concluding our past five years of premiumization. What have we done right?
In the coming five years, how should we carry out premiumization? We have reached some conclusions in the premiumization process. We think that we have done several things right. First, we adhere to premiumization. Five years ago, in 2020, when we started, internally, there were many different views. There were many doubts on us. This is the first thing that we have done correctly. Second, we use Xiaomi brand, to do premiumization. At that time, many people are of the view that we should perhaps start a new brand to do premiumization. We decided to use Xiaomi. Xiaomi, is one Xiaomi. When we do that, all our other products will benefit. Number three, what category should we start with? We decided to start with smartphone and EV. For other products, they do not have the capability yet. We limit that to the Chinese market.
After forming the right methodology, then we can go overseas. Now, with these four main strategies, we think they are all correct. In the past five years, I think we have also paid quite a lot of price, and the price has been quite high as well. In the coming five years, what should we do? First of all, based on the original exploration, to future planning, we cannot just pay the price again in each and every country. We need coordination and plan. We should follow a rhythm. Secondly, in terms of the premium foundation, for example, our smartphone, CNY 4,000-6,000, our market share was 78%. For CNY 6,000 plus smartphone, we still have not got enough layout. We only got 5%. I think we need to do something with a higher price, and then we have to extend that to all our other categories.
The fourth thing is, we need to move from China, to overseas. We can adopt the Chinese methodology, to overseas. In the coming five years, these are things we need to do. For Xiaomi SU7, our air conditioner, and also our recently launched tablet, they are moving towards ultra high-end products. We are exploring, and so far, we have achieved quite good feedback. For AI, a few days ago, you saw that we launched the MiMo, large model. We have achieved some results. Xiaomi, has to do some accumulation, and I think large model, is very important. We decided to invest greatly into large model. I think this is to serve our own business. Our user base is very big. There are many user scenarios. There are many user data as well.
If we can do a good job with infrastructure, use our data and scenarios well, I believe we will be able to explore a very good way of improving user experience. This is one of our equipment only, not the entirety for smartphones. We have to do a good job and also deeper integration with AI, then we can achieve a lot of advancements. I want to supplement with a number of numbers. First, if you read our PPT, you can see that in this quarter, in China, our high-end smartphone market share reached 25%. Last year, whole year, 23.3%, and then Q1 last year, 22 percentage points. In high-end smartphone market share, I think our shipment is also getting higher and higher. For CNY 4,000-5,000 smartphone market share, we are at 24.4%, and number one, really. Mr. Lu, mentioned home appliance.
In our disclosure, you can see our revenue. Revenue growth, was 113%, year-on-year growth, and our shipment only grew 65%. It is quite clear that our large home appliance ASP, continues to rise. For the third number, just now, Mr. Lu, said we will invest into AI, this year for R&D expenses, 30 billion. One quarter will be focused on AI, so our AI investment, will be quite huge. Last year, our CapEx was around 10 billion. This year, it will increase significantly, and some growth will be in AI. These are the numbers I would like to add.
Okay, thank you, Mr. Lu and Alan.
Thank you. Next question is from Sui, of UBS. Please go ahead.
Right, thank you, Mr. Lu and Alan, for taking my question. I have two questions. First, last week, the X-Ring chip, was launched on 15X use.
In the mid to long term, for the 6X series, will you use your self-developed SoC? In the coming three to five years, apart from smartphones and wearables, in other main EV home ecosystem, will you see the use of your own chips? In this quarter, you reached 25%, gross margin. In the coming quarters, Mr. Lu, do you think this is a sustainable level? You also mentioned other Chinese competitors, and before 18th of June, they will put in place some big competitive strategies. This year in Q2, what is your pricing strategy for 18th of June? Will that be very intense price competition? Thank you.
For X-Ring processors, I think we are very clear. We started from the most difficult. We wanted to do it well.
For our flagship chips, we want to make sure that they can reach our expectation, and then we can think of or consider other areas. At this stage, we have not considered making our X-Ring chip, in our non-flagship series. We are only thinking about our flagship chips. Will they be used in other products apart from smartphones? Chip, is a platform capability. With this platform capability, you can work on other chips that will not be very difficult. On this platform capability, it is most difficult to work on smartphone flagship SoC. It has high power consumption demand, and its IP, is extremely complicated. If you can have the ability of working on a flagship smartphone SoC, and then if you move to work on other chips, that will not be that difficult.
We want to focus on the flagship SoC, and then we want to make a modern model. In the future, we have to work on 4G, 5G together with 2G, 3G. That would be a complete matrix. That is what we need to do in this stage. For GP margin and also competition, I think right now for IoT, we just started. We are just taking off. We still have many capabilities that are not built yet. We have only enhanced some of our capabilities, but not all. When we have enhanced all our capabilities, then you will see a very good IoT, big appliance, as well as small appliance. You mentioned price adjustment and competition. We have not felt too much about that, and we just adhere to our established strategy, 20% GP margin.
I do not think there would be much volatility, arising from competition. I think the situation will be okay. Recently, you may be more concerned about our large appliance. You also need to look at our IoT categories, including TV, tablets, wearables, and also our ecosystem products. In the past quarter, they showed high year-on-year growth. If you only focus on one category, in fact, there is growth and good profit margin in other categories as well.
Thank you very much, Mr. Lu and Alan, for the answers. Once again, congratulations on your excellent results. Thank you.
Next question is from Citi, Qina, please.
Thank you, management. Congratulations on the strong results. I have two questions. Just now, I heard from Mr. Lu, that this year for smartphones, you are going to see some adjustments. For smartphones, in terms of your cost structure, have you seen some change?
It seems that there will not be much big cost impact affecting your profit, correct? It seems that there are other memory vendors who are adjusting their capacity, and that will impact the overall supply situation. In this regard, will you change your previous view? That is my first point. Second question regarding the EV business. Recently, some manufacturers are starting a price war. Right now, there is still a shortage of supply, but in the future, for the Chinese market, there will still be some gap or consolidation. Amidst this wave, what position does Xiaomi have? What are your way of thinking?
Right, I think you are talking about the cost. In Q2, I think if you look at internal inventory cost, decline, I think that would be a turning point to an increase.
If you look at different categories, I think EFS will see a small decline. In Q2, in Q3, Q4, I think that would be an upward trend. I do not think the increase will be very drastic. I think it will be a rather slow increase. For some products, there is some structural adjustment, but today, we have not seen a big increase in demand. We have not seen this factor. Overall speaking, our judgment is that we are quite accurate in our judgment. We have already made some advanced planning, and I think the impact on Xiaomi, will be controllable. That would be other areas or companies where costs will come down, and that would be some offset for us. Our price bargaining power is getting stronger. To Xiaomi, for the smartphone gross margin, I think it is controllable and stable.
Your next question is about EV price, competition and the impact on us. In the short run, I do not think there is much impact. If you focus on strong impact, I think it is part of market competition. I feel okay today. I think the situation is still okay. We just want to deliver the orders on hand, and then our users can use our cars. I think from SU7, you have already seen our product strength performance. Last year, at this time, we announced SU7. You are most concerned about the excellent results of SU7. Will the next model sell well? You may be able to do one model well. It is just a coincidence. There may be luck, but now you can see that we are even stronger and more competitive in our product strength.
We do have some capabilities which are much higher than the average capability of the industry. I guess you have seen that we are not only good at making products. We have supply chain capability as well. As a newcomer, within such a short period, we can complete this. We have the capability to build factories. In the past, we have not done that. We have comprehensive capabilities. I do not think price will solve all the problems. Thank you.
Thank you very much.
Thank you. Because of time, we will now take the last question. Last question is from Huatai, Ali Tin, please. Please go ahead. Thank you.
Congratulations on your excellent results. My first question is about chips. Last week, you announced the X-Ring 01 chip, and the related products. For your smartphone business and chip business, how do you work out your new price?
In the future, when it comes to your smartphone business and your overall gross margin, what will be the impact? For overseas smartphone market, in this quarter, we can see that in Africa market, your market share has risen a lot. In India, there is a slight decline. Mr. Lu, for overseas markets, India, Africa, what is the change in the competitive landscape? How do you see future growth in these markets?
Okay, when it comes to the self-developed chips, first of all, our strategy is clearer. We have multiple brands for our chip. It is a high-end chip. I think it is our strategy, long-term strategy. I think this is information about our high-end growth. It will continue to grow every year. That would be an increase of a few million pieces. We have our high-end smartphones and tablets.
We have a lot of confidence. I do not think there will be problems. We have communicated with Qualcomm, and we started from ourselves. We have good communication. For self-developed chips, so far, we only work on the flagship ones. Overall speaking, the self-developed usage rate will not be too high for gross margin. I think this is too early to talk about that. Perhaps right now, we do not pay much attention to financial targets. We focus more on whether we can make our products well. Today, we are investing without much consideration about cost. When it comes to smartphone, big chips, we have to consider the coming 5-10 years in order to achieve a reasonable model financially. For overseas smartphone markets, I think the decline in India is reasonable. Today, for the India market, it is quite special.
There are still issues that are yet to be resolved. Also, for normal business visa with India, it has not been normalized yet. For the Indian markets, we wanted to lower risk in this market. For Africa, the issue is that the overall has declined quite a lot. Amidst the overall industrial decline, we gave up some ultra low-end or low-end products, and we focused on mid to high-end products. You may say that, "Oh, there is more decline in our market share," but we have improved our product structure. For Africa, it is an emerging market. Market share last year was 13%, 12-13%. We still have huge room to improve. I think for Africa, we have to look at scale.
We have to look at the special characteristics of different markets and also our own position in those markets to determine the tactics of different markets. We cannot have the same strategy for all markets. Today, there are divergences among markets. Today, we divided the world into eight big regions. For these eight regions, we will refine our management based on the local information. You can turn to our disclosure. The first time in Africa, we were up 2.6 percentage points. In Southeast Asia, we became number two. Latin America, number two in Latin America. Mainland China, channel number one. We have said that many times. In these different sectors, we did well. Europe, market share was up 0.1 points year on year, even though the overall is not good. I think there is still much demand in the international market.
Okay, thank you very much. That's all for today. Okay, we will conclude the conference today. Thank you again for joining. We hope that you will continue to support Xiaomi Group. You may now disconnect. Good.