Xiaomi: here are the production costs of the latest Ultra, but they are wrong

One of Xiaomi's flagships has always been the edge some profits. Although currently the top of the range (and we emphasize, only those) cost much more, the profit margin that has always been heralded by the brand is and remains that of 5%. Despite the criticism that some users move towards the company about the increase some prices - justified above all by the increase in the costs of raw materials - the brand has always been faithful to this line. A few days ago Counterpoint Research he calculated the production costs of the latest top of the range Xiaomi 12S Ultra: many have felt betrayed. Let's see why.

How much does it cost to build Xiaomi 12S Ultra? More than $ 500 according to Counterpoint. But the company confirms: the components cost a lot more!

According to what revealed by Counterpoint Research in one of his reports, the production costs (excluding research) of the Xiaomi 12S Ultra amount to $ 516. However, the smartphone is sold for almost twice as much, exceeding (at a first analysis) the 5% of the margins we were talking about. It is worth paying attention to the fact that the calculated amount includes only the cost of the components, leaving aside the costs of design, warehouse, logistics, marketing and so on. But in this case, as is the case with all modern Xiaomi smartphones, profit clearly exceeds 5%. The increase in the price of Xiaomi smartphones has happened in the last two years and everyone has gradually got used to this. However, we would like to point out that the brands Redmi e POCO they have remained relatively affordable from the manufacturer.

But having said that, let's take a step back. In the spring of 2018, Lei Jun, CEO of Xiaomi, said the company refuses to receive more than 5% of the profits from the sale of smartphones, IoT electronic components and gadgets of all kinds. This is a figure that takes into account the tax deduction, the cost of brand promotion and customer service. So how is it possible that the device costs so much?

xiaomi 12s ultra: production costs

Experts note that the cost of the Xiaomi 12S Ultra equipment is quite high, as the smartphone uses target Leica, mobile platform Snapdragon 8 Plus Gen1, large screen, power management processor Xiaomi Surge G1 and other new components. But having said that, the company's response was not long in coming. The director of new Xiaomi products Wang Teng Thomas has already commented this information, stating that the cost of Xiaomi 12S Ultra was calculated incorrectly. Specifically, he refers to cameras.

In particular, he noted that it was only in the cost of the camera module that Counterpoint made a serious mistake: The price of a camera with Leica lenses and the latest 1-inch image sensor is considerably above $ 79. And this even without taking into account the ultra wide-angle and periscope module, which are used by Xiaomi 12S Ultra. Wang Teng Thomas added that there are errors in other articles and also mentioned that the cost it should include the cost of research and development, operating costs, taxes and many other items that, as we mentioned earlier, were not included in the calculation.

In this regard, remember that Xiaomi 12S Ultra is the first to use the image sensor Sony IMX989 1 inch, jointly developed by Xiaomi and Sony. Lei Jun, founder of Xiaomi and President and CEO of Xiaomi Group, said that the development cost was $ 15 million. Having said that, if we do not consider these costs, it is obvious that the production itself affects the famous 5% in a much more substantial way. For this reason, we always recommend that you inform yourself well about the news you read and analyze them in detail.

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9 December 2022 7: 55
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Price updated on: 9 December 2022 7:55
Gianluca Cobucci

Gianluca Cobucci

Passionate about technology, especially smartphones and PCs. I do my job with passion and respect the work of others.

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