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Xiaomi (XIACY) just fired a shot at two of the world's most valuable companies and it wasn't subtle. At a splashy product launch in China, CEO Lei Jun unveiled the 15S Pro smartphone, priced at just 5,499 yuan ($764), making it eligible for a government subsidy. That's well below the iPhone 16 Pro's 7,999 yuan starting point a critical price edge in a country where the 6,000 yuan threshold unlocks discounts for consumers. More importantly, Lei claimed Xiaomi's homegrown chip, the Xring O1, beats Apple's (NASDAQ:AAPL) A18 Pro in key areas like thermal performance during gaming. It took four years and $1.87 billion to develop and it's already in mass production using the same 3nm process that powers Apple's flagship.
But phones are just the warm-up act. Xiaomi's real ambition might be on four wheels. After undercutting Tesla (NASDAQ:TSLA) last year with its SU7 sedan priced $4,000 lower than the Model 3 the company is now preparing to launch the YU7 SUV in July. Lei didn't reveal pricing, but he did drop a few details: the YU7 will feature chips from Qualcomm and Nvidia, advanced driver assist, and up to 835 km of range. Still, the road hasn't been smooth. A fatal SU7 crash triggered tighter ad rules on driver-assist features. Despite that, Xiaomi delivered 28,000 vehicles in April and shows no signs of slowing down.
Investors will get their next read on May 27, when Xiaomi reports Q1 results. Last year, it posted record revenue and profit, with nearly 42% of sales coming from overseas markets. The stock is already up over 50% year-to-date and with Lei pledging 200 billion yuan in R&D through 2031, the market may be starting to realize: this isn't just a phone company anymore. Xiaomi wants to play in every arena Apple and Tesla dominate and it's bringing its own chips, cars, and pricing power to the fight.
This article first appeared on GuruFocus.