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Opinion: Xiaomi's high prices were inevitable and Huawei's ban is a blessing

The high MSRP of the Xiaomi flagship is justified – at least in relation to other high-end smartphones
The high MSRP of the Xiaomi flagship is justified – at least in relation to other high-end smartphones
The expensive pricing of the Mi smartphones is the right choice for Xiaomi and the only path to long-term success. In hindsight, the US sanctions against Huawei are an advantage for Xiaomi that should not be underestimated.

With the Mi 10 series, Xiaomi is definitely no longer just a price-performance brand. The Mi Note 10 already hinted at the future plans of the Chinese manufacturer. The Mi series will be the posterchild of the smartphone brand and now belongs to the premium category. This also includes the pricing, where Apple and Samsung have been leading the charge. Xiaomi still remains true to the identity of the series and even thought the Mi 10 Pro plays in a higher league when it comes to the price, it is still cheaper than an Oppo Find X2 Pro or Samsung's comparable 5G version of the Galaxy S20+ model, which costs 100 Euros (~$109) more. Meanwhile, the Ultra variant of the latter is 350 Euros (~$380) more expensive than the Mi 10 Pro. Only the prices of OnePlus and Huawei are very similar and Huawei's popularity and adoption outside of China makes it the more dangerous competitor for Xiaomi. However, the fact that Huawei's name is on the Entity List, meaning US companies such as Google are forbidden from having trade relations with the manufacturer, should come in handy for Xiaomi in terms of the number of potential sales of the Mi series - this may be the reason that Xiaomi is adjusting its pricing now, since the Mi Note 10 was sold for about 200 Euros (~$217) more locally than in China and although the Mi 10 starts at 4,000 Yuan in China, which is about 530 Euros or ~$566, the phone costs 800 Euros (~$869) in Germany. One year ago, the pricing of the Mi 9 painted a different picture (MSRP: 449 Euros/~$488).

The US ban of Huawei smartphones paves the way for Xiaomi.

Unlike its main domestic competitor Huawei, Xiaomi has been listed on the stock market for a while now - with limited success. In order to become more attractive for investors and to reach long-term success, Xiaomi's profit margins will have to increase - as they have for Apple, for example. While the latter does not reach a significantly higher number of sales compared to Samsung, the revenue of the US company is a large portion of the global smartphone wholesale revenue share. Higher prices that likely result in a higher profit margin from sales near the MSRP not only make Xiaomi more attractive for investors but also hint at a high quality and good workmanship of the Mi series - particularly since the manufacturer's price-conscious customers can still find what they are looking for within the Redmi or Pocophone series, which are now significantly cheaper comparitively to emphasize the premium character of the Mi series.

With the Mi 10 Pro, Xiaomi is now playing in the same league as Samsung, which is also reflected by the price.

Xiaomi has been seeing a massive increase in smartphone sales and market share for years and even outside of China. The Chinese manufacturer is now the number 1 in India - arguably the most important emerging market for smartphones. Similarly, Xiaomi has made a name for itself in Europe. The Mi phones have gained popularity particularly in the entry-level sector and with younger demographics in the past couple of years thanks to aggressive pricing and established Xiaomi as a brand. In China, Xiaomi has long since arrived at a similar status and brand identity as Apple, which even includes long queues in front of Mi stores before new releases. In Europe, Xiaomi appears to have gained the attention of a (from their perspective) critical mass of users and enough customer experience to be considered a sufficiently established international brand. As other companies have done before, the Chinese manufacturer now seemingly wants to turn its success into profit with higher prices in order to offset the cost of the effects of its expansion (such as rising warranty service costs).  

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> Expert Reviews and News on Laptops, Smartphones and Tech Innovations > News > News Archive > Newsarchive 2020 04 > Opinion: Xiaomi's high prices were inevitable and Huawei's ban is a blessing
Marcus Herbrich, 2020-04-23 (Update: 2020-05-19)