This week, we had one of the most important presentations of Xiaomi so far this year, the launch of Redmi K30, its first mid-range phone compatible with 5G networks. This feature so far we had only seen in high-end phones, with very high prices, usually even above $1,000 (except for Xiaomi models themselves). The K30 5G will be released for a price of around $284, but how much does it cost to manufacture?
Well, apparently a Chinese analyst has calculated the costs of all the components found inside this Redmi K30 5G, without taking into account the expense required by the research and the development of the phone itself and its distribution. Only the physical value of the hardware. The truth is that the final conclusion is surprising, because we could say that Xiaomi could even be losing money with the Redmi K30 5G.
The manufacturing cost of Redmi K30 5G is almost the same as the purchase cost
A few weeks ago we talked about the reason why Xiaomi phones were so cheap. Basically, it was because the profit obtained by the brand of the sale of each unit was between 8 and 9% of the value of the product. Well, with the Redmi K30 5G it could be even smaller. According to this Chinese analyst, the value of all components of the Redmi K30 5G is 1,730 yuan. Which at the current exchange is $250. The official price of this phone for its 6 + 64 GB version is 1,999 yuan $284.
According to a Chinese analyst,
The cost of components used in #RedmiK30 5G 6+64GB varaint is about 1746 Yuan($250)
This price doesn't include cost of research and development, Assembly and after sales expenditure!!!
So it clearly shows the gain is almost zero for Redmi#Redmi pic.twitter.com/odboVhhJ4i
— TechMate🤖 (@TechMate01) December 13, 2019
We are talking about the benefit that Xiaomi would obtain is about $34, a little more than that percentage that we were talking about before. So what is the problem? Well, this manufacturing cost is only of its components. At this price, it would be necessary to add the cost of development, manufacturing, distribution, promotion, etc. That is, with virtually every Redmi K30 5G that sells the brand, the benefit is nonexistent or very low. Also, if the phone offers come later, we could even be talking about losses.