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Xiaomi heavily implies global chip shortage could increase cost of its phones

Your low-cost Xiaomi phone could become a little less budget-friendly this year.

Published onMarch 25, 2021

Xiaomi logo.
  • During an earnings call, Xiaomi president Wang Xiang said Xiaomi prices could increase soon.
  • The potential price increases would be a direct result of the ongoing global chip shortage.
  • Xiaomi didn’t say when this could happen, but the idea is officially on the table.

Thanks to myriad factors, there’s a global chip shortage happening right now. The shortage touches on all industries, including smartphones, computers, gaming systems, and even automobiles. It’s one of the many reasons it’s so difficult to get a PlayStation 5, Xbox Series X/S, or a new NVIDIA GPU.

Unfortunately, it appears some smartphone prices could increase due to this shortage. On a call to discuss his company’s fourth-quarter earnings (via Reuters), Xiaomi president Wang Xiang suggested as much. Although he didn’t outright say Xiaomi prices would definitely increase, the idea is absolutely on the table.

Related: Xiaomi buyer’s guide: Everything you need to know

“We will continue to optimize the costs of our hardware devices, that’s for sure,” he said. “To be honest, we will do our best to offer the best price we can to consumers. But sometimes, we may have to pass part of the cost increase to the consumer in different cases.”

Because of the global shortage, the costs of creating smartphones are going up. Xiaomi can absorb some of those costs to prevent consumer pricing from needing to increase to compensate. However, there are obvious limits to how much Xiaomi can do that, especially when you consider how the company’s hardware profit margins are already razor-thin.

What does this mean for you? Unfortunately, it means that an upcoming Xiaomi phone that you expected to land at a certain price could land at a higher price than you may have hoped. How much higher Xiaomi prices could increase and how long those increases could last is anyone’s guess at this point.

In the meantime, the two latest POCO phones (a Xiaomi subsidiary) landed at very reasonable costs.

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