Xiaomi's Multifront Battle: Buybacks, Legal Woes, and Market Pressure

Xiaomi launches share buybacks to boost confidence as smartphone shipments fall 11.4% and a $72M India tax dispute looms. Key product launch and earnings are next.

The Chinese technology giant Xiaomi is deploying aggressive share repurchases in a bid to restore market confidence. However, this surface-level action masks deeper operational and legal challenges that continue to weigh heavily on the company. With its stock languishing near yearly lows, the upcoming launch of a new smartphone series is seen as a critical test.

Operational Headwinds Erode Market Position

Recent industry data reveals a concerning trend for Xiaomi's core smartphone business. Despite maintaining a global third-place ranking in the fourth quarter of 2025, according to research firms IDC and Omdia, the company's shipments experienced a significant year-over-year decline of 11.4%, falling to approximately 37.8 million units. This drop has reduced its global market share to around 11%.

Analysts point to persistent supply chain constraints and intensifying competitive pressure as primary drivers behind this contraction. The fundamental weakness in its main business is mirrored in the performance of its shares, which have shed nearly 45% of their value over the past twelve months.

Share Buybacks Aim to Stem the Tide

In a direct response to the sustained share price pressure, Xiaomi's management has initiated a substantial capital return program. On February 24 and 25, 2026, the company acquired 2.8 million Class B shares on each day, spending a total of 200 million Hong Kong dollars. This move is designed to project stability, even as the equity trades at just 3.82 euros, hovering barely above its 52-week low.

Mounting Legal Challenges in a Key Market

Compounding its operational difficulties is an unresolved legal dispute in one of its most important markets. In India, Xiaomi is contesting allegations of tax evasion related to royalty payments. The company has filed an appeal with the Supreme Court, seeking to overturn a demand for approximately 72 million US dollars in unpaid duties on these licensing fees.

All Eyes on Barcelona and Upcoming Earnings

Investor attention is now sharply focused on two imminent events. The first is the product unveiling in Barcelona on February 28, 2026, where Xiaomi will present its new Xiaomi 17 series. This launch is widely viewed as essential for generating much-needed growth momentum.

Subsequently, on March 24, the financial picture will come into clearer focus with the release of the company's quarterly earnings report. These back-to-back events will likely determine whether Xiaomi can begin to reverse its current trajectory.