Xiaomi President, Lu Weibing, tried to deflect the criticism over the pricing of the new Redmi K90 smartphone lineup by blaming "storage costs" for the price hikes.
Xiaomi President: "We cannot change the trend of global supply chains, and the rise in storage costs is much higher than expected and will continue to increase"
In a recent Weibo post, Lu Weibing claimed that Xiaomi "cannot change the trend of global supply chains, and the rise in storage costs is much higher than expected and will continue to increase."
There is some merit to this assertion. After all, According to a July report by Taiwan's Economic Times, major NAND manufacturers - including Samsung, SK Hynix, Micron, Kioxia, and Western Digital - have all implemented production cuts of 10 percent to 15 percent in H1 2025, pressurizing NAND pricing in the process.
Remember, Xiaomi sources its Flash storage from multiple vendors, which means it is unlikely to experience a price shock from any one particular supplier.
As per a tabulation by the DRAMeXchange, a 256Gb TLC UFS 4.1 Flash storage wafer currently costs an average of $2 per unit. Of course, a wafer is not equivalent to the finished flash storage product. Even so, it has experienced a material price hike.
For additional reference, Qualcomm's Snapdragon 8 Elite Gen 5, which is the SoC used in the Redmi K90 series, costs between $240 and $280, and forms a major cost center (includes DRAM costs).
Lu Weibing muddies his own argument
In his Weibo post, the President of Xiaomi contends:
"12GB + 512GB is the version with the largest user demand and the highest user voice. After discussion, we decided that the K90 standard version 12GB + 512GB version would be directly reduced by 300 yuan within the first sales month, and the price would be adjusted to 2899 yuan."
Lu Weibing has announced a discount of 300 yuan ($42) on the 12GB + 512GB base version of the Redmi K90 series.
This indicates that Xiaomi had enough of a cushion in its initial margin calculations to carve out a significant discount subsequently. This is not the way to engender confidence in your brand.
After all, if Xiaomi had enough room for this pricing maneuver, it should have implemented it from the get-go, not as a half-baked afterthought, and that too after a significant reaction.
While we do not doubt that the new K90 series is experiencing cost pressures, those headwinds are much more robust in other areas, especially apropos its pricey SoC.
Note: The post has been updated to differentiate between NAND and UFS 4.1 Flash storage.
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