If you had a smartphone, what would you do with it?
Over the past few years, we’ve met many people who tell us how thankful they are that we lowered the threshold for owning a smartphone, allowing more individuals to enjoy the convenience of the Internet.
From day one, we’ve been committed to changing the world by creating inspirational products with accessible price points, empowering everyone in the world to enjoy a connected and smart lifestyle. And we’ve been committed to ensuring consumers and fans have trust in our brand products and services.
On 25 Apr we announced that as a promise to all our users, the company will forever limit the net margin after tax for its entire hardware business (including smartphones, IoT and lifestyle products) to a maximum of 5%.
We made this announcement at the launch of our latest smartphone Mi 6X, which truly exemplifies our philosophy of making products with “the same specifications, at half the price”. Featuring a 20MP front camera and a rear dual camera setup sporting 20MP and 12MP sensors, further supported by AI software, Mi 6X delivers exceptional portrait photos. It is also powered by Qualcomm Snapdragon 660. Even with these features typically only available in smartphones in the RMB 3,000 category, Mi 6X is available at RMB 1,599.
In fact, our founder and CEO Lei Jun is taking the unprecedented step of incorporating this pledge into Xiaomi’s corporate mission statement.
Maintaining a low average net profit margin doesn’t mean we compromise quality for price. In fact, quality is the core of our value chain. We take craftsmanship very seriously, knowing that careful attention to detail makes all the difference.
In 2011 we announced our first smartphone – Mi 1, which is powered by Qualcomm Snapdragon S3, a cutting-edge dual-core processor at that time. This device has specifications you can find in the best smartphones in the global market, but at about half the price, RMB 1,999.
When creating Mi MIX in 2016, the revolutionary full screen display smartphone, we wanted to create a product unlike any other available at the time. Mi MIX incorporated leading-edge features such as removing the earpiece speaker, including the proximity sensor with piezoelectric ceramic technology and ultrasonic technology. The final price starting from RMB 3,499 yuan, shocked many people that such a revolutionary phone could be so affordable.
“From day one, Xiaomi has had a unique business model — and at the top of that model is our consumer to whom we have committed providing quality technology experiences accessible to the masses,” said Lei Jun. “We believe at our core that no one should be left behind when it comes to being connected to the world through technology.”
“We sell our smartphones and other hardware at affordable prices, but monetize our complementary services. If you use our browser, watch streaming video on our phones, or use our online services, we earn a profit,” Lei said.
In addition to our hardware, Xiaomi has a proven track record of developing killer apps including Mi Browser, Mi Video and Mi Music. This allows us to expand the relationship with our consumers in new ways and provide extended value over time. The connectivity between our devices and the seamless integration between hardware and Internet services enable us to deliver a top-of-the-line experience to our users.
With Xiaomi devices, those who were left behind by the smartphone revolution are now able to live a more connected life by engaging in a myriad of activities only a smartphone can provide, including: using ride hailing apps, advertising their products on social media, chatting with family and friends and learning a foreign language through the convenience a smartphone affords.
Ahead of the Redmi 5A launch in Vietnam in this January, we interviewed several Vietnamese people who were left behind by the smartphone revolution. Here’s a video of this interview: