The new smartphone from the Redmi brand was unveiled on December 10th. It came with several firsts, an extremely strong feature set, and an unreasonably low price.
Redmi K30 has such a low selling price that it raises the question of whether it even brings a profit to the manufacturer.
Premium equipment
When we talked about the firsts, we meant some elements of the specs that no smartphone in the world had until now. Above all, it’s the new 5G processor Snapdragon 765G, which—besides supporting 5G mobile networks—delivers high performance and also optimization for gaming. It was manufactured using a 7 nm process, as part of top-tier chipset technology.
Another element that puts the Redmi K30 at the top among smartphones is one of the rear cameras. It’s a 64 MPx sensor Sony IMX686, which was used in a smartphone for the first time. The flagship-class hardware is also strengthened by a display with a refresh rate of up to 120 Hz.
The Redmi K30 is the first smartphone from Redmi to offer support for 5G mobile networks. At the same time, it’s the first smartphone from the Xiaomi group that comes with two front cameras built into a display punch-hole.
The difference between the production and retail prices is minimal
From the described features, it’s clear that the production costs for the Redmi K30 aren’t cheap. The difference between the production cost and the selling price is much lower than we would expect.
A renowned Chinese analytics company calculated that the production cost of the Redmi K30 is approximately €225 / 5 740 Kč. The launch retail price is set at €256 / 6 550 Kč. This means the price difference on a single smartphone is approximately €31 / 791 Kč.
Moreover, this production cost doesn’t account for the entire development and research process that preceded the existence of the Redmi K30 5G device itself. The company also didn’t factor in the costs of assembly or distribution, so the actual amount left for the manufacturer is even a bit lower.
We’ve cited Xiaomi and Redmi’s top managers several times already, who—within the group’s business policy—admitted that the success of the brand also comes from low margins. According to the brand representatives, after all costs are deducted, they’re always lower than 5%. The Redmi K30 model only confirms these statements.
Smartphone hardware improves year after year, and manufacturers integrate increasingly better and more advanced components. That’s also reflected in rising prices. What doesn’t change—at least at Xiaomi—is the level of profit. Thanks to this approach, Xiaomi and Redmi products are successful.
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