The hidden cost of affordable high-end phones in China

swatkats

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"Affordable high-end phones."


This phrase sounds like a self-contradicting mix of words, but it is exactly what flagship phones in China seem to be. Launching at prices severely undercutting high-end phones like Samsung Galaxies and especially Apple's iPhones in the West, these devices claim to have an identical set of features and hardware, just for a lower price.

But there is a catch.

One of the big stars of the Chinese smartphone market is Xiaomi, a poster child for the "affordable high-end phone" trend. The company that has quickly built up a presence in Asia as its phones severely undercut the prices of rivals. Xiaomi has also just recently entered the European market and its high-end Xiaomi Mi Mix 2 costs just €500, half the price of the Galaxy Note 8 and iPhone X. Yet still, it features a modern, bezel-less design and top-notch hardware. The price of the Mi Mix 2 in China is even lower.
So how is this even possible?

Users in the United States in Europe may not know this, but it turns out that Xiaomi has a very different and slightly shocking business model in China. While its phones run on Android, they are heavily customized with the company's custom MIUI interface. But this is not just another Android skin: MIUI in China is... actually infested with ads.

This is not a bug, it is a feature. You cannot buy a Xiaomi phone with no system ads, it is actually the norm. In fact, Chinese users jokingly refer to the platform as "AdUI" because of it. Note that Xiaomi phones for other markets do not have system-wide ads, this is something that affects users in China.
To confirm that system ads are actually a feature, here is a recent Xiaomi promotion where the company sells a custom theme that you can purchase and enjoy a mostly ad-free experience for an added cost and limited time.

Think of it a bit like Amazon's special offers on a phone, but in a much more intrusive way, with ads popping up at unexpected places and within the interface, not just on the lockscreen.

Read more: https://www.phonearena.com/news/The-hidden-cost-of-affordable-high-end-phones-in-China_id101075
 

Spacescreamer

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"Ads popping up at unexpected places and within the interface, not just on the lockscreen."

With Jio's stupid ads coming up annoyingly out of nowhere.. this above here is def "AdUI"
 

doom2010

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Yeah, Xiaomi shows ad now. Specially from their Mi Apps and Mi Store scetion through notification. It's irritating. You can disable notification for these app and you good to go.

The interesting part is that they are mentioning Xiaomi here, but what about other Chinese brands that produce "affordable high-end phones" and also sponsor PA, like Vernee, UmiDigi, etc.? Do they follow the same logic?

The way the article is written, it should be named "the hidden cost of affordable high-end phones from Xiaomi", since there is no relevant information regarding other brands.
-- a comment from phonearena
 

Harpy.eagle

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May be jio also has business model of recovering 50k cr debt by showing sick ads. They should give their service free then instead of charging 150 bucks pm. 3rd class company.

Ofcourse its another matter that earlier AVOID sold their customer database to 3rd parties for more revenue.
 

Futureized

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It seems US companies like #Samsung #Apple start fearing from low cost Chinese phones ?
#Phonearena itself is a self-subsidary of US finances, somewhere in past also powered by both companies who are facing issues now..

What is the profit earned from selling a 100 US$ (AS AN EXAMPLE) to #Samsung-business or #Apple-business ?
What if same specifications phone are sold to Indians @ 10 US$ TO 20 US$ ?

i HAD to say something i forgot.
I am being VERY VERY HAPPY, that Indians are able to enjoy all the apps @ highest quality using these chinese brands..


MORE ABOUT ADS:
We should question ad-networks which provide detailed information about advertisements displayed even on a specific handset..
In this case all popular ad-networks like #Google-Ireland should also stop displaying ads..

NOTE: There are no chinese ad-networks displaying ads to Indians.. VERY VERY IMPORTANT. (in any considering app, except belonging to China)
 

swatkats

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It seems US companies like #Samsung #Apple start fearing from low cost Chinese phones ?
#Phonearena itself is a self-subsidary of US finances, somewhere in past also powered by both companies who are facing issues now..

What is the profit earned from selling a 100 US$ (AS AN EXAMPLE) to #Samsung-business or #Apple-business ?
What if same specifications phone are sold to Indians @ 10 US$ TO 20 US$ ?

i HAD to say something i forgot.
I am being VERY VERY HAPPY, that Indians are able to enjoy all the apps @ highest quality using these chinese brands..


MORE ABOUT ADS:
We should question ad-networks which provide detailed information about advertisements displayed even on a specific handset..
In this case all popular ad-networks like #Google-Ireland should also stop displaying ads..

NOTE: There are no chinese ad-networks displaying ads to Indians.. VERY VERY IMPORTANT. (in any considering app, except belonging to China)


Chinese Facepalm!!!!!!!!!
 

Harpy.eagle

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Mi seems to have started showing ads in their phones here in india too.I have secondary rn3, not being used everyday... It showed kinda 'promoted apps' thing. Mi apps ads are different and I have seen them.

Seems that's the reason for them to be not friendly with developers/ custom roms. To capture market by selling products at throw away prices and blast ads to masses for revenue. If lot of people use custom ROMs, how would have this strategy panned out.

Google also did same thing, just didn't hide the motive.
 

Attachments

soulweaver

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It seems US companies like #Samsung #Apple start fearing from low cost Chinese phones ?
#Phonearena itself is a self-subsidary of US finances, somewhere in past also powered by both companies who are facing issues now..

What is the profit earned from selling a 100 US$ (AS AN EXAMPLE) to #Samsung-business or #Apple-business ?
What if same specifications phone are sold to Indians @ 10 US$ TO 20 US$ ?

i HAD to say something i forgot.
I am being VERY VERY HAPPY, that Indians are able to enjoy all the apps @ highest quality using these chinese brands..


MORE ABOUT ADS:
We should question ad-networks which provide detailed information about advertisements displayed even on a specific handset..
In this case all popular ad-networks like #Google-Ireland should also stop displaying ads..

NOTE: There are no chinese ad-networks displaying ads to Indians.. VERY VERY IMPORTANT. (in any considering app, except belonging to China)
Who is this Futureized guy? In almost every thread, there is a post of his which makes no sense no matter how hard I try to decipher it. They however, invariably talk about China, BJP, Jingoism, and Underlined points. I think we need a special dislike button for this guy's posts.

Totally agree with @swatkats image and the @Spacescreamer like!
 
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Lord Nemesis

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What is the cost of manufacturing a smart phone? iPhone X costs about $370 to manufacture compared to its price tag of $999.

https://www.techwalls.com/production-costs-of-smartphones/

Of course there are other costs as well. R&D is used to be less than 2% of their annual expenditure, but has recently risen close to 5% which is probably is due to the In house SoC development. Majority of the cost is for marketing. Even then, I think Apple can sell the phone for $500 and still make a tidy profit. Also don't forget that Apple gets 30% of the share from App sales as well.

Most of the other big brands too have a significant margin on the cost of the phone.

The average mid range phone that Xiaomi makes should not cost more than $100-150. If they limit the profit margins, they can sell the phone for a very competitive price. So, Ad's are not the reason they can sell a phone for a very reasonable price. Its just that the other brands bloat their prices to make a 50-70% margin.
 

blr_p

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X's price is higher due to that faceID thing. Must have added a hundred or so ontop of the price
 

blr_p

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Ah so its the screen then, apple has definitely got stiffed there
 

iPwnz

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Thank gawd I really never liked Xiaomi phones and Jio. While many of us care about the situation and hate the ads you will be amazed to know that many more don't give a shit about it either. They are like "oh it's just an ad. Better close it and do my own thing." It's weird haha.