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Wednesday, 25 April 2018

Xiaomi promises its hardware business model and overall net profit margin will never exceed 5%

Xiaomi at the Mi 6X launch event in China has also made a separate announcement where it promised that the overall net profit margin will never exceed 5%. This also includes smartphones, IoT and lifestyle products. It also said that If the margin crosses 5%, then the company will find a way to return the excess above 5% to its users. With this new initiative, the company is aiming to earn the long-term support of users and sell large volumes with small profit margins which will result in suitable hardware profits in the long term. Xiaomi has created a triathlon” business model, encompassing hardware, internet service, and new retail. The company claims that Xiaomi is the only smartphone in the world that has rebounded after a decline in sales. It also says that  10,000 mAh powerbanks were priced above 200 RMB, whereas Xiaomi sold it for 69 RMB (Rs. 730 approx.). The newly launched Mi 6X which is priced at 1699 RMB, is almost half the price of the competition. It says that its mission is to relentlessly pursue great products with honest prices so that everyone can enjoy the benefits of technology. Beyond smartphones, the company moved into other business models and strategy to over 100 Mi Ecosystem IoT and lifestyle product ...