The odd world of Xiaomi’s phone pricing
So you have decided to buy an Android smartphone from Xiaomi. Great, but this is where you’ll need to step up to a real challenge. No matter which Xiaomi device you consider, there almost always seems to be another at the same price point, or one not too distant from it, and seemingly not too different either most of the time.
As it turns out, between the price points of Rs5,999 and Rs16,999, there are as many as 22 Xiaomi phones, including different storage and memory variants for each. And we are not even counting the colour options for each phone.
Meanwhile, the competition is following a more conventional strategy. A glance at Motorola’s line-up reveals the Moto C, Moto C Plus, Moto E4, the Moto E4 Plus, Moto G5s and the Moto G5s Plus—six models between Rs6,000 and Rs15,000. There are older models too in the mix, but availability is limited. Apple currently sells the iPhone 6, iPhone 6 Plus, iPhone 6s, iPhone 6s Plus, iPhone 7, iPhone 7 Plus, iPhone 8, iPhone 8 Plus and iPhone X in India, with prices of the iPhone 6 starting at around Rs30,000, while the iPhone X starts at around Rs90,000—this is the wide price band for nine phones, and none tread on the other’s toes.
Known in its initial days for its rather streamlined portfolio of phones, Xiaomi’s pricing puzzle of late is becoming difficult to keep tabs on. In mid-2016, Xiaomi had the high-end Mi 5, a large screen Mi Max, a mid-segment Redmi Note 3 and an affordable Redmi 2. They seldom got in each other’s way.
That has changed, though the company still maintains that its smartphone line-up is lean. “Compared to our current competitors, Xiaomi’s portfolio in terms of our products remains concise and streamlined. A large array of products across price segments ensures that we are able to cater to varying needs and demands and offer quality products to the masses,” insists Raghu Reddy, head of online sales, Xiaomi India.
Having multiple models in a price segment is considered good since it gives the consumer plenty of choice. “This price segment is the major volume generator, contributing to approximately 70% of the total smartphone market, hence (it’s) the key focus area for Xiaomi,” says Navkendar Singh, associate research director –client devices (India & South Asia), International Data Corporation (IDC) India. It is more than just price play which dictates this strategy. “It’s like ‘pampering’ a user to pick up the device they want,” says Faisal Kawoosa, head, new initiatives, CyberMedia Research. “This also helps the brand to offset the risk of an ‘out of stock’ situation, which can potentially result in sales foregone,” he adds.
At the most congested price point, Rs6,999, you can now pick from four devices—Redmi 5A (3 GB RAM/32 GB memory variant), Redmi 4A (3 GB/32 GB), Redmi Y1 Lite, and Redmi 4 (2 GB/16 GB). Of these, the Redmi 5A and Y1 Lite are relatively new.
One would think that the newer devices would have better hardware, and, at the same price, would offer better value. However, the surprise is that the Redmi 4 still offers a more powerful Qualcomm Snapdragon 435 processor (the three other phones have a Qualcomm Snapdragon 425 processor) and the largest battery capacity (4,100 mAh; the Redmi4A comes second, with a 3,120 mAh battery).
So, if a Xiaomi phone were to be recommended at this price point, it would be, surprisingly, the older device.
New editions of devices seem to cost as much (or close to as much) as their predecessors. The 3 GB/ 32 GB editions of this year’s Redmi Note 5 and the older Redmi Note 4, for instance, have exactly the same price—Rs9,999. “More often than not, this is done to have a soft handover between older and newer models, with older models going end of life in a few months of the new model launch,” says IDC’s Singh.
Certainly, Xiaomi has dominated the smartphone market of late. Will it continue to do so? “Only as long as price parity is ensured across all channels and clear differentiation in terms of price and spec is maintained across the range,” says Singh.
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