Xiaomi CEO: Rising chip costs also noticeable in smartphone prices
The Chinese smartphone manufacturer explains its current pricing policy. The new focus of relevant suppliers is also likely to be a contributing factor.
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After the price of its new entry-level smartphones in the Redmi K90 series caused disappointment among Chinese customers, manufacturer Xiaomi is now explaining the reasons. The cost pressure has also been passed on to the pricing of its own products, wrote Xiaomi President Lu Weibing on the Chinese microblogging site Weibo. Costs for memory chips have risen significantly more than expected, and this could worsen.
Previously, on Thursday, Xiaomi had launched its new Redmi K90 model, equipped with 12 GB of RAM and 256 GB of flash storage – at a price of 2599 yuan, equivalent to about 314 euros. The previous year's K80 Series predecessor model was still priced at 2499 yuan, around 302 euros. This caused discontent among the price-sensitive Chinese customer base.
No more mini surcharges for double storage
The higher surcharge for the K90 version with 512 GB of flash storage also caused disappointment. Customers have to pay an additional 300 yuan, totaling 2899 yuan, which translates to a retail price of around 350 euros. This is a lot for the Chinese market. Even in Europe, model variants with twice the storage can sometimes be obtained for only 40 to 50 euros more, as is the case with the Xiaomi 15T.
Weibing apparently felt compelled to respond to the criticism. In his Weibo post, he announced a discount of 300 yuan for Chinese customers on the 512 GB variant of the K90, which will be available immediately for one month. This makes it just as affordable as the 256 GB variant.
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As a smartphone manufacturer, Xiaomi is likely to experience exactly what happened to manufacturers of budget PCs and televisions in the summer: memory manufacturers are shifting their production. They are increasingly building DDR5 and GDDR7 chips for graphics cards and High Bandwidth Memory (HBM) for AI accelerators instead of smaller chips for PCs, televisions, and also smartphones. Market observer Trendforce observed price increases of 13 to 18 percent for DDR4 chips from April to the end of June.
(nen)
