A few days ago, we brought you a breakdown of part of the production costs of the Xiaomi Mi 10 / Pro smartphone. It was a small explanation for the higher price of Xiaomi’s new flagship phones, which is understandable in this respect.
The Mi 10 component analysis brought surprising findings
This time, however, Techinsights’ team focused on an in-depth analysis of the production costs for the Xiaomi Mi 10 Pro model with 12 GB of RAM and 256 GB of storage. The resulting price is surprising, but even bigger disappointment came from the comparison with the iPhone 11 Pro Max.
Based on a price analysis of the individual components used in the Xiaomi Mi 10 Pro, Techinsights provided an estimate of production costs. The final manufacturing cost of this model could be around 440 $, which after conversion is approximately 402 € / 10 164 kč.
A similar price analysis was also carried out for Apple’s device, specifically the iPhone 11 Pro Max 512 GB. The production costs for this smartphone were added up to approximately 490 $ (447 € / 11 302 kč). There would be nothing strange about that, unless we take the selling prices of both devices into account.
While the examined Xiaomi Mi 10 version is sold in China for about 618 € / 15 625 kč, the compared iPhone costs approximately 1 100 € / 27 812 kč.
We don’t have to go into more detail that Apple is one of the most expensive brands and their margins are among the largest. In this case, the profit is at the level of more than 100 % if we don’t take into account research, development, advertising and marketing in general.
On the other hand, Xiaomi strictly sticks to its pricing policy and thanks to that it’s becoming more and more successful. Xiaomi CEO Lei Jun has previously explained what margin the company has and what the reason is.
As you can see, Xiaomi’s margin is still much more modest in this case, and net profit is even reduced by research and development costs, advertising, shipping and logistics. Let’s not forget that the Xiaomi Mi 10 is a “revolutionary” smartphone for Xiaomi, meaning a big technological leap in several indicators.
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