Xiaomi Heats Up Phone War With Apple — New Chip, New SUV, and Big R&D Plans

Chinese tech company Xiaomi says its new Xring O1 chip is better than Apple’s top chip — and comes with a cheaper phone.

At a launch event on Thursday, Xiaomi showed off its 15S Pro smartphone, starting at 5,499 yuan ($764). That’s much cheaper than the iPhone 16 Pro (7,999 yuan) and Pro Max (9,999 yuan). The lower price also means buyers may qualify for government discounts in China.

Xiaomi CEO Lei Jun claimed that the new Xring O1 chip outperforms Apple’s A18 Pro chip on some points, like handling games with less heat. CNBC hasn’t confirmed these claims and has asked Apple for a response.

Lei said Xiaomi is not trying to replace Apple, but the new chip shows how far the company has come. The chip was made using a 3-nanometer process, similar to Apple’s A18 Pro.

Xiaomi plans to invest 200 billion yuan ($28 billion) into research over the next five years and spend at least 50 billion yuan on chip development over the next 10 years. So far, the Xring O1 has taken four years and 13.5 billion yuan to develop.

Currently, 40% of Xiaomi phones still use chips made by Qualcomm and MediaTek, but the company is pushing to build more of its own.

At the same event, Lei also introduced Xiaomi’s next electric vehicle: the YU7 SUV, which will officially launch in July. It follows the earlier launch of the SU7 sedan, which was cheaper than Tesla’s Model 3. The YU7 will include chips from Qualcomm and Nvidia, with an 835 km driving range and advanced driver assist features.

Xiaomi sold over 28,000 vehicles in April, just below its March record. This comes after a crash involving the SU7 sedan, which led to new rules in China on how car companies talk about driver-assist systems.

The company will release its first-quarter results on May 27. In 2024, Xiaomi reported record-high revenue and profits, with 42% of sales coming from outside China. Its stock is currently up more than 50% this year.