Xiaomi CEO Might Increase Prices of Smartphones in an Attempt to Make Them More Premium-Looking Than ‘Cheap’
There was a time not too long ago when Xiaomi fans all around the world breathed a sigh of relief when the company announced that its products, including smartphones, will remain affordable and the profit margin will be capped at 5 percent. However, it seems Xiaomi will not keep up with that commitment, as it apparently wants to shake off its reputation of being a company that cranks out cheap phones.
The Mi Series Will Reportedly Be More Expensive in the Future, but the Company’s CEO Has Not Reported How Much Each Customer Will Have to Spend Going Forward
Part of the reason why Xiaomi smartphones are so popular is their value proposition as the company offers flagship level specs at a fraction of price of competing products from the likes of Samsung, Apple, and Huawei. The company is incredibly popular in its home country of China and other price-sensitive markets like India. In fact, it is one of the top five smartphone companies in the world by sales volume.
Since low-priced smartphones are often perceived as low-quality, Xiaomi’s CEO Lei Jun has decided to raise the prices of the future Xiaomi handsets. Consumers can expect future Xiaomi phones to fetch more than RMB 3,000 or roughly $450. Currently, the average price of Xiaomi phones is around $300, which is what entry-level phones from other companies cost.
If it’s any consolation, the company doesn’t plan to hike the prices significantly and it has also implied that the revenue would be plowed back into the business to create better products. OnePlus has been doing something similar over the past few years. In the beginning, the company released affordable phones such as the OnePlus One but as they increased in popularity, the prices were subsequently increased with each generation.
Even after the price increase, Xiaomi smartphones will presumably still cost a lot lower than the competition. Last year, the company separated the Redmi brand as an affordable line, which was indicative of a change in its strategy. The new marketing and pricing strategy could help the company re-establish itself as a premium smartphone maker.
While it’s not known if the prices will increase across the board, the flagship Mi series will presumably cross the $500 mark. However, for a brand that made inroads in the market with its low-priced products, re-strategizing might not prove to be that easy unless it offers innovative features that justify the price hike.
News Source: TechNode