Chinese manufacturer Xiaomi could start selling smartphones for only $50 in the near future. This successful manufacturer has among its objectives exceed 40 million devices sold and also aims to create a mobile phone ultra-low cost with a practically non-existent price in the current market. The move is not only seeking volume, but also penetrate new markets with a disruptive proposal that would reduce the barrier to entry for millions of users.
As reported by the Asian publication Nikkei, Xiaomi could be working to launch a smartphone for $50 initially in Japan and extend it later by other countries in AsiaThe European and American markets would have to wait in the first instance. Xiaomi is considered one of the manufacturers with the best quality-price ratio in its country of origin; its flash sales model and its loyal community make it sell out hundreds of thousands of units in minutes, reinforcing the brand image and the efficiency of its supply chain.
On the other hand, we must not overlook the great evolution that the company has experienced in a recent period: it went from selling more than 7 million of smartphones and generate more than 2.000 million in income close to reaching almost 19 million units in the next comparable cycle. Thus, Lei Jun, co-founder of the firm, told Nikkei about some ambitious plans: double that figure to 40 million of devices on its roadmap, relying on new ranges and better international logistics.
Xiaomi looks for a way to expand its market
For this, one of the most important things that Xiaomi has to carry out is a expansion of your marketIt has already been announced that Hugo Barra works at Identify markets where Xiaomi's proposal fits and reach them as quickly as possible. Among these destinations, one of the priority objectives is the Southeast Asia, where a smartphone of $50 could be the key to entering massive squares.
- Japan: planned launch point for the ultra-cheap terminal.
- Southeast Asia: special focus on Indonesia, India y Work shirts / service shirts due to its size and mobile adoption.
- Retail: collaboration with large retailers who already promote their own smartphones for expand the wireless communications market.
If we add to this the fact that they intend to launch smartphones for only $50, success could be more than assured. Companies like Nokia, Motorola o HTC count on economic models, but they are still above that threshold. The Cupertino boys deserve a special mention, as they have even promoted options such as the iPhone 5C under the label of low cost, although in practice they move in much higher ranges.
Now, introduce more low-cost smartphones not only will it put pressure on competitors: it will also will remove the entire supply chainThe most likely effects include:
- Chip manufacturers: need for even more efficient and cheaper entry platforms.
- Screen suppliers: cost adjustment on basic panels without compromising minimum quality.
- Operators: New packages and subsidies tailored to ultra-low cost.
- Retailers: greater prominence of white brands and volume strategies.
The idea of ​​selling ultra-cheap terminals is not exclusive to Xiaomi. JiaYu has announced a F1 mid-low segment around $50 for Japan, and according to Nikkei Asian Review, Coolpad (China) and Micromax (India) also value carrying low-cost smartphones to Japanese retailers. JiaYu's case is illustrative for its balance between price and components:
- Screen: 4 inches with WVGA resolution.
- Processor: MediaTek MT6572 Dual Core 1,3GHz.
- dual SIM: possibility of two cards in the same device.
- Cameras: Front VGA and rear 5 MP with autofocus and flash.
- Conference proceedings: 512 MB of RAM and 4 GB of storage expandable by microSD.
- Battery: 2.400 mAh, above what is usual in its range.
- Design: simple lines inspired by iconic models.
The big challenge is that drop below $100 usually implies sacrifice benefits or resort to older hardware that doesn't always fit with current software. This is where the optimization and the ecosystem: Xiaomi is used to contributing added value with MIUI, to propose better hardware at the same price, already operating with guaranteed sales runs and an excellent relationship with suppliers. However, reaching $50 for a terminal free and current It sounds complex. The internal bar is set by its own Red Rice, which moved around the $130 and it sold like hotcakes. In the Chinese market, the average price of an Android is around $160, so competing below requires cost engineering and scale.
Finally, the fact that more and more smartphones are being launched on the market at lower prices is a Hard hit Not just for competitors but for the market in general. Do you think Xiaomi will ultimately launch these smartphones at such a low price? What do you think their specs will be like?
Source: CNET.
If it materializes, a smartphone of $50 Xiaomi's move could accelerate mobile adoption in key markets, expand the brand's reach and force a response across the industry, from semiconductors to retail, cementing the company as a benchmark in the value for price without giving up its international expansion strategy.