Ever since the launch of the brand in India, Xiaomi has always been known for the most aggressive pricing in the market. Each device from the company sells like hot pancakes in the Indian market and the profitability of the smartphones has always been questioned. Xiaomi also recently announced that the company will be imposing a cap of a maximum 5% profit on the hardware that it sells.
However, recently Xiaomi also announced the increase in the prices of the extremely famous Xiaomi Redmi Note 5 Pro and the Xiaomi Mi TV 4. According to the company, the increase in the prices is due to the increase in the customs duties levied by the government in the new budget that is to be rolled out. The company also mentions the plunging of the Indian Rupee value with the international market since the beginning of the year. A combination of these two steps seems to have forced the company to increase the prices of the smartphone and the TV in India.
Further going ahead with the explanation, the company says that the increase in the price of the smartphone is in an effort to ramp up the supply for the smartphone. The recent budget changes have resulted in a change in the PCBA import taxes and since the smartphone is not completely manufactured in India, the import charges have resulted in a spike at the end user prices as well. The new prices will be effective across all the modes that are being employed for the sale of the devices including Flipkart, Mi Home, Mi.com and other offline retailers. The Xiaomi Redmi Note 5 Pro will see an increase in price by Rs 1000 and the 4GB RAM + 64GB storage variant will now retail for Rs 14,999. Also, the Mi TV 4 will see a price hike of Rs 5,000 and the new price will be effective across all the retailers.
In the recent announcement, Manu Kumar Jain said
“In order to ramp up supply for the Redmi Note 5 Pro, we are importing a significant amount of PCBAs as our local PCBA production would only ramp up to 100 percent by CY Q3 2018. With the recent changes in tax structure on PCBA imports and the depreciation of the rupee (by around 5 percent since the beginning of the year), this has resulted in a significant increase in costs for us.”
To reduce confusion, the Xiaomi India MD Manu Kumar Jain assured the customers that the company will be honoring the Rs 13,999 price for the pre-orders that were already placed for the Redmi Note 5 Pro on the official website. Also, the 6GB RAM variant price doesn’t change and the model will still be sold for a price of Rs 16,999. The Mi TV 4 will now be available for an increased cost of Rs 5000 that now brings the cost to Rs 44,999
Will hurt consumers who were waiting for an out of the box offers especially online, thanks