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Xiaomi Doesn’t Make Money From Smartphone Sales

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Ever wonder why Xiaomi’s products are so cheap compared to the competition? Aside from selling their wares online and cutting out the middleman, it seems that the Chinese company has a completely unheard of reason why they sell their products at rock bottom prices compared to the competition: they don’t care about profits from smartphone sales.

Hugo Barra, Xiaomi’s global vice-president said that their business model isn’t based completely on smartphone sales. “Basically we’re giving [handsets] to you without making any money… we care about the recurring revenue streams over many years,” he told Reuters in an interview.

“We could sell 10 billion smartphones and we wouldn’t make a single dime in profits,” he added.

Instead, Xiaomi makes its money from sales of smart home devices and its software eco-system. Another major sales driver is its connected home devices and other appliances. Suddenly, the rice cookers, robotic vacuums and air purifiers start to make more sense.

Source

John Nieves

John is a veteran technology and gadget journalist with more than 10 years of experience both in print and online. When not writing about technology, he frequently gets lost in the boonies playing soldier.

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4 Comments

  1. seryoso? bakit ka pa nag negosyo kung di ka kikita?

    but the smartphone specs are impressive though at cheaper price.

    Di ko lang alam ang quality ng gawa.

    1. Superb quality naman phones nila. Ung Mi3 ko buhay na buhay pa today, may iba pa nga na namamalikmata kasi akala nila bagong model ng phone. lol

    2. sabi daw software e. i assume na kumikita sila sa mga services. like sa dota 2 free to play sya pero malaki ang kita sa mga skins betting TI etc.

    3. “Instead, Xiaomi makes its money from sales of smart home devices and its software eco-system. Another major sales driver is its connected home devices and other appliances.”

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