Xiaomi India COO on “pragmatic approach to 5G”, Redmi Note 11 phone price hike
A “pragmatic approach to 5G” is how Muralikrishnan B, COO of Xiaomi India, explains the company’s current Redmi Note portfolio, which currently only has two 5G-capable variants. While that might mean Redmi is behind some rivals – many of which are introducing a 5G phone at every possible price point – Xiaomi has good reason to balance 4G and 5G phones in their portfolio.
“If you look at Ericsson’s 5G adoption report, in five years, 55% of the subscriber base will be 5G subscribers and 39% will be 4G subscribers. What this tells us is that you have to have a pragmatic approach to 4G over 5G,” he told indianexpress.com on the sidelines of the Redmi Note 11 Pro launch in Bangalore.
He further pointed to data that even in countries where 5G has been deployed, the subscriber base remains low for the next generation of mobile internet technology. “If you were to take the example of the United States, almost two-thirds or 63% of shipments are 5G, but only 20% of the subscriber base is 5G. In China, 75% of shipments are 5G and about 35% are 5G subscribers,” said Xiaomi’s COO.
But he also admitted that “there is overwhelming data to indicate that a majority of customers want a 5G device because they want to make it future-proof.”
Regarding the price increase of the Redmi Note 11 series – the Redmi Note 11 Pro+ starts at Rs 20,999 making it one of the most expensive ever – Muralikrishnan pointed out that there had several reasons for this. “When it comes to pricing, the only undisputed trend we see in the market is an overall increase in ASP (average selling price). In fact, segments above Rs 20,000 are growing at breakneck speed, nearly 100% year-on-year. People are choosing to upgrade to much fuller, almost flagship-level phones,” he pointed out, and better specs would mean higher prices.
He also added that other changes necessitated a price increase, such as the increase in GST (from 12% to 18% in April 2020), as well as the increase in component prices and an overall increase in shipping costs. .
As for supply chain issues, he called it a perfect storm thanks to Covid and related labor issues, adding that “the whole transition from 4G to 5G” has also made matters worse. the situation. “Because chipmakers allocated more capacity to 5G, 4G supply also took a hit,” he explained. However, Xiaomi’s COO said he was more optimistic in 2022 regarding these issues, and they were seeing positive signals coming from March 2022.