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Despite the fact that it had been rumored for a while now, the CEO of Xiaomi has just made it official. A few weeks ago we already talked about the company's business model and its need to increase the price of its devices to improve its financial results. Now Lei Jun, the founder and president of the Chinese company, confirms it: the price of Xiaomi phones will grow in future product launches. It will do so with the aim of increasing the profit margin per unit sold and therefore the profitability of the company over time.
Xiaomi mobiles will now be - a bit - more expensive
The financial panorama that surrounds Xiaomi had been predicting it since the company's going public in August of last year. Since then until today, the shares of the company have been decreasing steadily to the 12 dollars per share that Xiaomi currently operates.
In an attempt to improve its profit margins, as well as the reputation of the company in China and other Asian countries, Lei Jun has announced an imminent price increase for all its products related to mobile technology. This was confirmed by the president in question in a recent interview through Technode.
His words read the following:
“At Xiaomi we want to get rid of the reputation that our phones cost less than 2,000 yuan (Chinese currency). We want to make more and better products "
To these statements Jun has added these others:
“I have already communicated to the company internally that this will be the last time that our mobiles will cost less than 3,000 yuan. In the future our phones will be more expensive, not excessively, but somewhat more expensive "
With these words, the director confirms what has been rumored among the different media for some time. The company will increase the price of all its smartphones. It has not been specified to what type of phones or from what date. The only thing we know is that most of its terminals will have a price higher than 400 euros at the exchange rate.
With the respective application of taxes in Europe, the final value of its models could be equal to that of other brands such as Samsung, Huawei and even Motorola. Recall that to date the company only sells with a profit margin of 5% per unit sold. Brands like Samsung or Apple operate with margins that even reach 30%. Will this be the end of cheap Xiaomi phones? We can only wait to answer this question.
Source - Technode
