Why Do Xiaomi Smartphones Cost So Little?

2 Mins read

The world of technology moves at such high rates that it seems to have passed a lifetime since the event in Milan that marked the arrival of Xiaomi in Italy. Yet, it was 2018: three years ago. This is enough to understand the huge steps forward made by the brand in a short time: nowadays, Xiaomi is a well-established name in Italy.

Nor is it necessary to mention the excellent sales data, as it is undeniable that the public who approaches these products has also been particularly extended to our parts. The mainstream dimension and the consequent arrival of Xiaomi smartphones in the hands of less “expert” users has brought with them some doubts, which are spreading among those who do not hang out every day the market of the To understand, a question that relatives could ask at a classic dinner is: “Why does Xiaomi cost little?”

After the fact that probably the relative on duty is not realizing that he has played a game of words “genius” (just see the association to the brand POCO, always linked to Xiaomi), there are some fundamental points that can make the In fact, behind the generally excellent quality/price ratio of the brand’s products (generalizing is never fair, but pass this simplification on to us), there is a philosophy that is interesting to deepen.

Low profit margin on single smartphone

Not everyone knows that Xiaomi has decided to keep the profit margin low on the individual device, instead focusing on large quantities. In the context of a conference on company financial results, CEO Lei Jun stated in 2019 that Xiaomi’s gross profit margin at the time was 8.9%.

According to SlashGear and iMore, this is a much lower margin than other tech companies. In fact, according to some estimates, the final cost of an Apple iPhone 13 would be to be associated “only” to 36%/37% to the components present inside the device, therefore the company of Cupertino would point to a profit margin considerably higher than that of

The e-commerce issue

There are also other factors that affect the generally “low prices” of Xiaomi devices. In fact, in 2019, Jun also referred to the fact that the company was oriented towards e-commerce, aiming at physical shops to a certain extent. Clearly, the latter are, despite everything, an important market, but they also have other costs. Squeezing the eye to the e-commerce world is therefore another choice that can allow to contain the final price.

The integrated advertising in Xiaomi brand devices

There is also the question of “alternative” business methods, such as advertisements that appear within certain applications. These are clearly strategically positioned and designed to keep the costs of Xiaomi brand smartphones low without “intrusive” the user too much.

In short, in front of the classic question “why do Xiaomi smartphones cost so little?”, the ways to argue are certainly not lacking. For the rest, clearly the world of smartphones is constantly evolving and from the statements of Lei Jun of 2019 has passed several of water under the bridges, so much so that nowadays there are top of the range Xiaomi with an important price all in all In any case, it was interesting to look into a matter that has been debated for some time now.

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