Xiaomi is the one of popular smartphone maker in China, after they released the new Xaomi Red Rice phone, Xiaomi is also becoming the hype after they already hire the Google’s ex-VP of Android, Hugo Barra, just tendered his resignation to become VP of Xiaomi Global.
The Xiaomi Red Rice phone, also known as the Hongmi, sells for RMB799 in China (around $130 USD) putting it firmly in that low-end market.
Despite its low price tag, the phone has respectable hardware including a MediaTek MT6589 chipset that reportedly accounts for 20% of the overall manufacturing costs. packs with 4.7-inch IPS display is made by AUO and represents 22% of the device costs. The screen does offer 312ppi making it a nice upgrade from the more common 220ppi smartphone screens in similarly priced devices.
According to TrendForce, the Xiaomi is only $85 bill of material (BOM) for Xiaomi Red Rice phone, this is the nice strategy. The Xiaomi’s groundbreaking price will inevitably have an influence on other smartphone manufacturers’ pricing strategies, especially for low to mid-end products.
The Xiaomi is able to squeeze so much profit out of its device in part by controlling when the product is unveiled and controlling its inventory more effectively than competitors.
