Xiaomi Promises to Return Phone Unit Profits Exceeding 5% to Users

Liao Shumin

(Yicai Global) April 26 — Xiaomi Inc., sometimes referred to as China’s Apple, is committed to ensuring that net profit from its hardware business will not exceed 5 percent annually, otherwise the firm will return the extra turnover to users in a reasonable way.

Chairman and Chief Executive Lei Jun made the promise at the launch of the Beijing-based firm’s new Mi 6X handset at a press conference at Wuhan University, which he attended in his younger days.

The net profit ratio of 5 percent appears low in comparison to Apple’s 20 percent after-tax profit margin. The Chinese phone maker’s comment, however, is in line with its chiseled pricing strategy and speaks for a competitive era in the mobile phone market, where many makers find their models matched with similar features from rivals. Xiaomi’s announcement may trigger a price war in the domestic market in 2018.

The Mi 6X boasts a 6-inch display, Snapdragon 660 processor, two 20-megapixel cameras, and a fingerprint sensor on the rear. Prices start at CNY1599 (USD250).

Editors: Emmi Laine, William Clegg