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The Xiaomi 12S Ultra retails for $890, but it only costs $516 to make
- The Xiaomi 12S Ultra reportedly costs $516 to make.
- Xiaomi’s device launched in China for ~$890.
- This doesn’t reflect other costs associated with a smartphone though.
The Xiaomi 12S Ultra is the company’s premium flagship for 2022, offering plenty of features and being part of the first wave of Leica-branded Xiaomi smartphones. The phone is only available in China for 5,999 yuan (~$890), but it looks like we now have an idea of how much it costs to make.
Counterpoint Research put together a bill of materials analysis for the Xiaomi 12S Ultra, claiming that the base 8GB/256GB model costs $516 to make. The tracking firm says processing, display, and camera sub-systems accounted for almost two-thirds of the cost.
This doesn’t mean Xiaomi is making $374 on every 12S Ultra sold though, as the bill of materials doesn’t take into account costs such as research and development, marketing, and other forms of labor.
Nevertheless, the estimate comes a few years after Xiaomi committed to a 5% profit margin on its smartphones. So what does the 12S Ultra’s release mean for this profit margin cap? Well, the Mi 11 Ultra release last year might give us an idea, as it was the company’s first premium flagship phone.
“We will always hold to an overall 5% profit margin across all of our hardware business,” the company previously told us when we asked about the profit margin cap in the wake of the Mi 11 Ultra launch last year.
The statement suggests there’s some wiggle room for individual products to have higher or lower profit margins, as long as the profit margin for the entire hardware business is capped at 5%.