Xiaomi makes excellent phones, but its price is surprisingly low. We talked to various industry experts and Xiaomi phone users to discover why Xiaomi phones are so cheap.https://a10dc09833327dbbd70bb5f600e02515.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html
We found that Xiaomi phones are cheap because they don’t do any advertisements for their phones. Their product has a longer life cycle, Xiaomi copies other phone designs saving its R & D costs, collects and sells users data, keeps their profit margin very low, and sells all their phones online.
Below we described each of the points mentioned above in detail.
Xiaomi does virtually no advertisement.
Before we talk about Xiaomi, let us speak about the world’s most popular electric car manufacturer, “Tesla.” Tesla does not spend a dime on the advertisement. Still, throughout the world, almost everyone knows about Tesla. They rely entirely on word of mouth advertisement where a Tesla customer or a fan talks about Tesla to their friends and relatives and inspires them to buy a Tesla vehicle.
Xiaomi also follows this same word of mouth advertisement strategy. They do not spend money on advertisement.nullnull
Every other company spends a lot of money on the advertisement from its profit. But if a company can eliminate this cost, it can improve its profit margin or lower its product prices. Xiaomi chose the later — taking less profit and pass the savings to consumers. It is one of the reasons why Xiaomi phones are good but cheap.
Xiaomi phones have a longer product cycle.
If you look into Apple, Samsung, Huawei, or any other phone manufacturer, you will find that every company brings out a new phone each year. Every year they present a phone with the latest and greatest display, RAM, memory, processor, etc. Every new technology costs more and only drops in prices after several years. But these companies are always chasing after new technologies. So, the prices of the parts they use on their phone are higher. As a result, phone prices are also higher.
However, Xiaomi takes a different approach. Instead of releasing phones with newer hardware each year, Xiaomi keeps their phone hardware the same over 24-36 months. It is a brilliant strategy.
A newly released hardware is always expensive, whether it is a display, RAM, sd card, or processor. However, the prices of this hardware decrease rapidly after 12-16 months. Xiaomi takes advantage of this. Instead of iterating hardware every 12 months, they keep their phone hardware the same for 24-36 months. This way, they can provide superior quality hardware at lower prices. Moreover, as their product cycle spans to 2 to 3 years, they can buy equipment in bulk at lower prices.
Xiaomi copies other phone designs.
Xiaomi makes a lot of products. Though they make a lot of products, one thing is right for all of its products. None of its design is original. Xiaomi shamelessly copies the design of other famous companies.
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