Opinion | The Xiaomi Mi 10 and Mi 10 Pro mark the end of the era of affordable Xiaomi flagships
About a month ago, Xiaomi launched its flagships for the year, the Mi 10 and Mi 10 Pro in China. Yesterday, the company finally brought the phones to the global market, and while the Mi 10 and Mi 10 Pro are solid phones when evaluated in a vacuum, Xiaomi may likely have put off all but the biggest of fans with one not-so-minor detail. Pricing.
Xiaomi, right out of nowhere, priced the Mi 10 and Mi 10 Pro a lot higher than anyone expected. The Mi 10 starts at €799, while the Mi 10 Pro begins at a shocking €999. Let that sink in: €999 for a Xiaomi phone.
Make no mistake about it, having an issue with Xiaomi pricing their flagship at €999 has nothing to do with a perceived notion of the quality of the company's offerings. Xiaomi makes excellent phones, and reserve the right to price them as deemed fit. However, €999 for a phone with a Xiaomi crest on it would have been unimaginable a few years ago, for the sole reason that the company's unique selling point is the incredible performance to price ratio it offers across all segments. Pricing the Mi 10 Pro at €999 changes that.
The Samsung Galaxy S20 5G is priced the same in Europe, and offers better support, a cleaner UI, water resistance, better cameras, and debate for as long as you will, a badge with way more cachet. We now live in a world where a Xiaomi device, perhaps, offers less value than a Samsung flagship.
This was always in the making. The Mi Mix Alpha, while a purely conceptual phone, was priced at over US$2000. It raised eyebrows but was ignored for the fact that it was never designed to be sold to the public. The Mi Note 10 Pro, however, was Xiaomi's first statement of intent, as it launched with a massive global MSRP of €649. The Mi 10—and Mi 10 Pro, in particular—are more of the same.
Even worse is the fact that the global MSRPs don't at all match up to the Chinese retail prices. Xiaomi has been expanding in Europe over the past two years, and it's surprising that the company has taken to inflating its prices in that market.
While the Mi 10 starts at CNY 3,999 (€505) in China, Xiaomi sells the exact same phone for €799 in Europe. Accounting for a 20% VAT only takes that figure to €600, but the company charges a massive €200 extra. The Mi 10 Pro goes from CNY 5,499 (€695) to €999, over €150 more after accounting for VAT.
Considering the percentage of BoM (Bill of Materials) to MSRP further shows how terrible the Mi 10's pricing is. A few weeks ago, Tech Insights revealed that the Mi 10 costs Xiaomi an estimated US$440 to build. Crunching the numbers shows that the Mi 10's BoM accounts for just 49% of the phone's European MSRP.
It's not quite as bad as the Samsung Galaxy S20 Ultra with its 38% BoM to MSRP figure, but is right on par with the Galaxy S9+ (45%), and the OnePlus 7 Pro (48%). That number jumps to an industry-leading 75% when considering the Chinese MSRP of the Mi 10.
The Mi 10 and Mi 10 Pro are overpriced in Europe, and the numbers support that. Perhaps the term "overpriced" is a tad misguided in this case, as Xiaomi is only just catching up to the competition in terms of margins. But not catching up to the competition in terms of margins is what made Xiaomi, well, Xiaomi...and those days may now be over. Unless, of course, you're willing to buy from China.