Tech Trends

Is Xiaomi following OnePlus Pricing Strategy with Poco ?

Xiaomi launched the Poco F1 — a phone that packs in a Snapdragon 845, up to 8GB of RAM, and up to 256GB storage for just Rs. 21,000; and with that, Xiaomi completely destroyed the mid-range segment.

It seems like a winning move from Xiaomi in a market segment where there was not a lot of competition… it also seems like a move that’s remarkably similar to something that happened a few years back.

A Move Reminiscent of the OnePlus One

Let’s take a step back into 2014, when the OnePlus One was launched. At its time, the phone packed in flagship hardware including a Snapdragon 801, 3GB of RAM, and up to 64GB of storage and it was launched at Rs. 21,999.

It grabbed headlines all over the world and it certainly looks like Xiaomi is using that same strategy with the Poco F1, and that means that the Poco F2 next year will probably come with a better design, improved cameras, and the Snapdragon 855 for a couple extra thousand Rupees.

The strategy seems to be working out for the company. After the Poco F1’s first sale, Xiaomi claimed that it had made sales of over Rs. 200 Crore in 5 minutes. Some quick calculations on that number mean that the company sold around 90,000 to 100,000 units of the Poco F1. Let’s compare that to the OnePlus 6‘s sales.

OnePlus claimed sales of Rs. 100 Crore in 10 minutes of its first sale. That comes up to around 30,000 units — less than a third of the Poco F1’s sales.

A Master Stroke from Xiaomi?

Xiaomi’s move is a master stroke. The company is already owning the Indian smartphone market. According to Counterpoint Research’s data for the Indian smartphone market.

Xiaomi and Samsung are tied for the top spot with 28% shareeach of the smartphone market in the country. However, looking at the way the two companies are growing, from Q2 2017 to Q2 2018, Samsung went from 23% market share to 28%, and Xiaomi went from 16% to 28% market share; clearly, Xiaomi’s growth is incredible, and a lot of that is thanks to its hold on the budget market.

If Xiaomi is indeed following this strategy, it’ll take the company two or three years before it manages to hog a meaningful chunk of the mid-range market in India as well, and establishes itself as the leader in the country’s smartphone market.

Who Will Win the Price Wars?

All that is great, but the real winner from these smartphone price wars (as we like to call them) will be the consumers. After all, when Pocophone has a smartphone with a Snapdragon 845 for Rs. 21,000 other companies will have to do something to compete, and while they may not all come out with flagship hardware touting smartphones in a similar price bracket, they’ll definitely have to mark down their mid-rangers.

Think about it, will anyone buy a phone in the ballpark of the Poco F1 if it has a Snapdragon 636, 660, or even 710? I don’t think so, and so companies will have no choice but to reduce prices of phones with a Snapdragon 636, 660, or 710 processor. That will inevitably result in consumers getting better hardware for a lower price.
Personally, I’m in awe of Xiaomi’s move with the Poco F1. It’s almost like a checkmate to every other company out there selling phones in this price range, and while companies like Samsung might claim to disrupt the mid-range segment in India later this year, I highly doubt they’ll beat the Poco F1, and in a few years, Xiaomi’s off-shoot Pocophone might become the next OnePlus of the world. Anyway, these smartphone price wars are definitely going to be great for us, as consumers.

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