June 18, 2015 by ...
Xiaomi has slashed prices of its flagship 64g Mi4 model by 16% and the 16g version by 25% in India. These moves are in response to OnePlus doing something similar.
Cutting prices is not uncommon before releasing new models, as is the case with these two firms. But in reality, the price war signifies something much deeper. Absent indigenous innovation and design, Xiaomi has little ‘true value’ to capitalize on. It’s phones have good specs, but still in all, it’s merely an Apple clone. OnePlus in many respects is the same.
As a result, these companies must compete on price. As neither has created its unique look, it has nothing else to monetize. In other words, the Indian market is crowded by faux-iPhones battling it out. When one drops its price the other must follow.
Lei Jun, Xiaomi’s CEO is aware of this and has begun cutting corners. His new phones will ship sans charger in a cost-cutting measure.
By selling on the margins, Xiaomi has left itself little-to-no wiggle room. This the price war.