Why do the Xiaomi, compared to those of other larger companies, they cost less? This is a question that so many users have been asking themselves the moment the company came in Europe. But even today, despite the slight price increase (justified and only of the top of the range), the low and medium-low range continues to be the cheapest ever. Here we will try to answer the question. We will try, why there is no absolutely valid answer.
The reasons why Xiaomi smartphones cost less than those of the competition. Why? And is it always a winning strategy?
First let's see why Xiaomi smartphones cost poco when compared with the various Samsung and Huawei, we must open horizons. In fact, we will have to think with a broader mentality, or rather more Global. We will not have to think about the European market alone, benzì we will consider the sales of all units in the world. Only in this way, in our opinion, will we be able to really understand why the company's devices are so cheap.
Collaborations
First of all, it seems necessary to address the issue of collaborations, specifically with Qualcomm. If we go to see the Xiaomi smartphone catalog, we will easily understand that the most devices are equipped with an SoC from this company. In comparison, those with a MediaTek processor (again globally) are fewer in number. But because? Is it just a question of performance? Clearly not.
The collaboration between the two companies is something the brand can really boast of! Think that in 2019, at the time of the presentation of the processor Qualcomm Snapdragon 765G, the president of Xiaomi Lin Bin said the Chinese company had some prominence when choosing the name of the SoC. Recall in this regard that it is the processor that is mounted for the first time by Redmi K30. Perhaps it is an exaggeration to say it, but this "partnership" can only benefit Xiaomi's business which could take components at a lower cost.
Number
How many smartphones are presented every year by Xiaomi? An infinity if we consider that it encompasses three brands (Mi, POCO and Redmi). But have we ever reasoned that a third of these are all the same? We remember that we have to think GLOBALLY. Those who came out with one name in China arrived in India with another appellation and so also in Europe. While this may seem like a differentiation, it really isn't: it is always the same device.
At least externally it's the same device, sure. The processor changes often and willingly but the one that weighs the most in the chain of assembly is the outer shell. So if one or more factories produce a model incessantly for days and days, production costs inevitably go down. But the story does not end here. Few know that Xiaomi often produces in outsourcing. What does it mean?
In short, there are companies that produce for you. There collaboration between Xiaomi and ODM exists mainly for the Redmi series, which adopts the model HDI (independent design houses). ODMs are responsible for research and development and design. Xiaomi directly controls the procurement of materials, while third-party suppliers EMS (electronic manufacturing services) deal with manufacturing and assembly.
This allows the costs to be lowered since the companies themselves do only a small part of the work.
Hardware
It goes without saying that if a company produces so many smartphones, it cannot offer too much variety. The fact that devices are spread all over the globe and that there are so many varieties of them means that hardware can change poco in time. In fact, if we think about it, the processors of the devices (for some years now) are always the same. Xiaomi itself has multiple smartphones with the same platforms. And the release dates of these same devices stretch from 1 to 2 years. Basically by purchasing “dated” SoCs, costs decrease upstream and this allows to decrease the selling prices.
Profit of Xiaomi
Xiaomi has been in the field for years and it has been showing off its own for years 5% policy. As we xiaomists know well, the company's net revenues correspond to a small amount of the amount that we users spend. One of the strengths is in fact that the prices of the company's smartphones are low by virtue of the poco reload that is above.
Clearly this leads to the law of numbers, having to sell in huge quantities and it is therefore that we return to the second point of this article. The more the company sells, the more it earns.
Advertising
How many dealer do we see Xiaomi smartphones? Honestly only in the last year I saw a sporadic commercial on TV for the Mi 10T series and the Mi 11 series. Well, this too is not a random choice and to understand it let's go back 6 years. In 2015, the former marketing executive Hugo Barra (former also of Google) said that the company does not spend a lot of money on media advertising, perhaps a few pennies on Facebook campaigns.
We are not experts in this area but it is universally recognized that advertisements cost a lot even if, on the other hand, they yield a lot. But this is perhaps a choice of the company: the focus is on the community of people and on “internal” word of mouth.
That said: do Xiaomi's smartphones cost less than the others? Yes, they cost less and the opposite cannot be said. Even the flagships, which have for obvious reasons increased their production cost, are on the market at a lower cost than their competitors. However, we must keep in mind that this will not always be the case in the future. Because of chip crisis which started last year, the prices of all devices, even TVs, will increase.
Why does the wifi module not work on the mi11, an 800 $ cell phone and all xiaomi does is silence the users who encounter the problem?
The only thing we are able to do as users is report til we drop