Xiaomi could raise prices to improve reputation

Lei Jun, the CEO of Xiaomi, reportedly wanted to give a more premium image to its brand, including stopping smartphones sold at a price too low.
Lei Jun, CEO of Xiaomi

Although sometimes called "the Chinese Apple", Xiaomi has a reputation as a cheap builder, with products at unbeatable value for money. Clearly, with its Mi 9 proposed to 469 euros, the Chinese giant is enough to scare the biggest in the sector by offering a very good smartphone whose price excuses very easily the few gaps. Can one be demanding with a smartphone that costs two to three times less than those he wants to compete?
Towards a premium brand
However, this could change in the future with the firm's desire to get rid of its low-cost brand image. Lei Jun, Xiaomi's CEO, reportedly told Technode to "get rid of phones worth less than 2,000 Yuan [260 euros HT environ] and want to invest more to make better products. "
He would have added about Mi 9: "I said internally internally that it was perhaps the last time our price would be less than 3,000 yuan. [400 euros HT]… In the future, our phones could become more expensive – not a lot, but a little more expensive. "
We contacted Xiaomi and are waiting for an answer to confirm that this is not a translation error and that this was the idea that Lei Jun wanted to convey during this interview.
Conflicting information?
Parallel to this announcement, Xiaomi today unveiled the European prices of Redmi Note 7: 179 euros, a price down so compared to previous models. Admittedly, it is no longer about Xiaomi strictly speaking, but it is however a product proposed to less than 1000 yuan in China.
Also remember that Xiaomi has promised to stay below the 5% profit margins, which means that a price increase should be accompanied by a larger investment, in terms of components (which are already generally well made ), or in terms of software investment, a particularly important point as Google has proved with the photo part of its pixels.
Signs more and more marked
Between the increase of R & D to differentiate thanks to its range Mi Mix, its partnerships with names as prestigious as that of Philippe Starck, and the creation of the mark Redmi to separate its products of entry-level, Xiaomi seems to clearly want to compete with Apple, Samsung and Huawei in the ultra premium segment. However, this is inexorably due to an increase in prices, a global deployment and marketing that can reach a wide audience. So many elements that could end up in the long run to make Xiaomi much less attractive to aggressive price / quality lovers.
Read on FrAndroid: Getting started with the Xiaomi Mi 9: a racing beast that will shade the competition


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