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Market Insight

Xiaomi pushes Redmi into the flagship sphere with the launch of the K20 Pro

July 25, 2019

Gerrit Schneemann Gerrit Schneemann Senior Analyst, Smartphones, IHS Markit

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The Redmi range of smartphones has been a key driver for Xiaomi’s success in India. So much so, that the company decided earlier this year that Redmi will be a sub-brand under the Xiaomi umbrella. Until now, part of the appeal of Redmi devices has been the pricing strategy behind them. Most devices in this range cost well below $200 and feature desirable hardware, like 48-megapixel cameras and multi lens configurations with AI enhancements. The goal has been to on-board users to the Xiaomi device and services ecosystem with bottom pricing for good smartphone hardware.

Now, Xiaomi is changing its strategy for the Redmi range dramatically. The new K 20 Pro is positioned as a true flagship device for the Redmi brand. The company is combining premium hardware components while retaining aggressive pricing.

The launch of the new Redmi K 20 Pro is significant, because it indicates Xiaomi’s desire to grow ASPs in India and the realization that there are users in the market who are looking for premium handsets. It is not a coincidence that Xiaomi compared its own device to the OnePlus 7 Pro throughout the presentation. OnePlus has been actively going after the premium segment in India with enough success to prompt a reaction from Xiaomi.

Improved hardware

Xiaomi released two versions of the Redmi K20 today. The Redmi K20 Pro is the clear flagship device, while the Redmi K20 makes some component compromises to reach its aggressive pricing target.

 

 

Redmi K20

Redmi K20 Pro

Processor

Qualcomm Snapdragon 730

Qualcomm Snapdragon 855

Display

6.39 FHD+ AMOLED display, 19.5:9 aspect ratio, HDR

6.39 FHD+ AMOLED display, 19.5:9 aspect ratio, HDR

Battery

4,000 mAh

4,000 mAh

Charging

18W SonicCharge

27W SonicCharge

Fingerprint sensor

In-display

In-display

Other

Hi-Res audio, gaming enhancements, headphone jack

Hi-Res audio, headphone jack

Pricing with memory configuration

6GB/64GB: 21,999 R ~ $320

6GB/128GB: 23,999 R ~ $348

6GB/128GB: 27,999 R ~ $407

8GB/256GB: 30,999 R ~ $450

Price comparison

Apple iPhone Xs, 64GB: 99,900 R ~ $1,452

Apple iPhone Xs, 512GB: 134,900 R ~ $1,961

OnePlus 7 Pro, 256GB: 48,999 R ~ $712

 

To push the Redmi K20 series forward, Xiaomi focused on four key areas when designing and launching the device: performance, design, cameras and a “no compromise” attitude to pricing.

To address performance, Xiaomi is using the Qualcomm Snapdragon 855 on the Pro version, highlighting improved mobile gaming as a key differentiator, like others have done over the last six to nine months.

A significant upgrade is the move to AMOLED displays – the first such displays on a K-series device. Combined with a design that goes beyond the “functional” design of other Redmi devices, the new screens enable new features, like always-on display, and aid in delivering more immersive media consumption experiences.

With the cameras, Xiaomi continues to push megapixel numbers while now adding more AI capabilities and visual differentiators. First, the triple rear cameras feature a 48-megapixel main lens, a 13-megapixel wide angle lens and an eight-megapixel telephoto lens.

A new AI feature in the camera app is Skyscaping, which allows users to change the sky and overall lighting in a scene after taking the picture: to sun shine, dusk or sunset. The K20 devices are the first to enable this feature.

To achieve a high screen-to-body aspect ratio, Xiaomi hides the front facing, 20-megapixel, camera with a pop-up mechanism. To add more purpose to the pop-up mechanism, and visually set this solution apart from other pop-up cameras, Xiaomi has included lights on either side of the lens – for better looking selfies.

Aggressive pricing

Xiaomi is not moving away from its aggressive pricing of the Redmi series. The top model of the K20 Pro will cost around $450 when they become available later in the month. The entry level K20 will cost around $320. In both cases, Xiaomi is aggressively under cutting comparable Android devices, like the OnePlus 7 Pro, and is well below flagship pricing for high-end Samsung, Huawei and Apple devices.

However, the new K20 devices are the most expensive Redmi-series devices Xiaomi has launched. After the launch, Xiaomi received negative feedback from Indian users and fans, because of the increased pricing. This push back on the K20 pricing illustrates that pricing remains critical for Indian customers, even when faced with a better equipped product.

Xiaomi must now work to move some of its Redmi user base along to an upgraded device successfully, if it wants to address a higher ASP market segment. At the same time, the Redmi brand has grown strong in India and represents a set of expectations from buyers to Xiaomi. Changing the strategy of price-first for Redmi could be challenging.

Lastly, the launch and subsequent critical feedback on pricing also has an impact on the wider market: OEMs should take the hint and realize that premium handsets with premium prices will continue to struggle in India. To succeed in India, a more nuanced approach is needed, if the goal is to compete with Xiaomi for market share. At the same time, it does not appear that there is a new user base developing like those users attracted to high midrange or premium devices in other markets – indicating continued troubles for Apple ahead. Conversely, Samsung’s shift in strategy in the second half of 2018 to bring new and advanced features to mid-range devices quicker should keep the company in a position to compete well with Xiaomi going forward.

Geography
India
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