According to the Times of India report, Xiaomi’s Global Vice President, Hugo Barra revealed in a press conference that the current conditions make it impossible for the company to manufacture a sub-Rs. 5,000 smartphone that can also deliver a good consumer experience. Barra said, “You should get more out of a Rs. 6,000 smartphone and we’ve tried to deliver that experience but getting it below Rs. 6,000 looks difficult at the moment.”
Xiaomi devices are known to be priced just a little over the total cost of the components. To keep costs low, they don’t have any physical retail outlets, but rely on online retailers and social media for getting the word out and selling products online. Further cuts in the cost of smartphones would hurt the company’s profits even more.
Despite being the third-largest smartphone vendor in the world, Chinese securities filings show that Xiaomi had made a profit of just $56.15 million out of the $4.30 billion it earned in revenue in 2013. Reports also suggest that Xiaomi smartphone sales grew over 20 percent in the July-September quarter, 2014.
The Xiaomi VP has expressed plans of investing in Indian start-ups across different areas, including language projects. Not only is he looking to partner with app developers but also intends to look for projects, which can be integrated with the handset’s customised Android OS – MIUI.