Hacker News Reader

Comment by throwaway9d0291 | Hacker News Reader

Given recent flagships from these manufacturers are priced around $1k, I wonder how this can be reconciled with Xiaomi releasing a phone with this chip for <$500: https://arstechnica.com/gadgets/2020/03/xiaomis-redmi-k30-pr...

Are they looking to make more affordable flagships or are they upset their margins are being hurt?

View on HN

I think you based this counter-argument on the title instead of the article. The article says:

> According to the report, both Google and LG are opting for the Snapdragon 765G, but not because it’s just saving them money. It’s Qualcomm’s first SoC to sport an embedded 5G modem saving manufacturers a ton of design hassles.

And that Xiaomi you linked doesn't have mmWave 5G. So Xiaomi avoided the design complication the 865 results in by just not having the full radio feature set.

This then is the other side of the problem with 5G being not the same thing as 5G. It's not just carriers that get to save money rebranding 4G LTE as 5G, but also phone manufacturers can now also claim 5G without actually supporting all of 5G. I wouldn't be surprised if mmWave 5G gets branded as 5G+ or something like that to differentiate itself from 5G-the-rebranded-4G-LTE.

Note that there are three different things here:

LTE-Advanced rebranded as "5Ge" (only AT&T for now AFAIK)

Low-band NR which is genuinely 5G but only moderately faster than LTE-A (T-Mobile)

High-band (mmwave) NR which is the fastest 5G flavor but it cuts out really easily (Verizon)

A couple thoughts: Xiaomi probably builds an order of magnitude more phones than LG and Google. So there's volume discounting at play. Also, Xiaomi's affordable phones are missing important NA bands. I wonder how this omission influences the cost of the SOC.

Considering a lot of that cost is licensing, probably a fair bit.

LG actually builds a surprisingly higher number of phones than one would expect.

Xiaomi has a very interesting pricing strategy. Generally speaking, they tend to be lower margin, but also they really cut supplier margin to the bone. They love pitting competitors against each other for the same socket (promising high volume, but ultimately you get beat out by someone else). It's hard to turn down their promised volume numbers. I wouldn't be surprised if they're getting the 865 cheaper than other players like Samsung.

Xiao is loosing money on most of its phones. Phones are a small net loss for them.

They recoup the cost big time on accessories, and other merchandise.

It didn't work in India (biggest market outside of China,) where BBK rules supreme: People will buy the best deal phone, but will not sign onto their overpriced smart vacuum cleaners.

Funny you mention smart vacuum cleaners. Xiaomi vacuums (the roborock ones) are some of the best value to feature robot vacuums out there. The only thing that beats them on the high end is the iRobot latest, which costs like 2-3x as much.

Sounds exactly like how Walmart works with suppliers.

865 is simply to small a performance jump to be worth it. Flagship phones are mostly about the latest features not the specs as relatively few people actually buy them.

Unfortunately it's a bandwagon effect. If you don't have the latest processor (and another major flagship does), you're behind, regardless of actual performance benefits.

The number of people outside of HN who buy a phone based on the processor is vanishingly small.

It's not like when Intel's advertising told everyone they should feel bad if they didn't have a Pentium in their desktop boxes. If you ask people what processor is in their current phone, 99.99999999999% will have no idea.

> The number of people outside of HN who buy a phone based on the processor is vanishingly small.

I would say that the number of people on HN who buy a phone based on the processor is vanishingly small.

And this is not a trend that went unnoticed. A very expensive Digitimes market research papers tell that we had a very long and very pronounced trend of people who previously bought flaghship products downgrading to mid and low end products.

It's very visible in the Laptop market too. People now how are buying into a niche of laptops with weak CPU, but good large screens. Those were making killer sales for last 3-4 years.

I would bet the number of people on HN who buy a phone based on the processor is vanishingly small. Myself included. Maybe remove a couple of 9's and your second statement would hold too.

I honestly would think HN would be the opposite. The only reason I got rid of my Nexus 5 was that the battery was dying, there isn't really anything compelling enough for me to even consider a new flagship phone.

Sure, and I'm not saying people do... I'm just saying that if one company decides to include a Snapdragon 865, then you heavily pressure other companies into including it. It's only when everyone collectively agrees to not include the latest that you see that happen.

So that’s one in ten trillion, or did I miscount the 9s?

Heck, many can't tell the difference between RAM and storage despite having owned a mobile for years/decades.

There are two other possible factors.

1. Qualcomm has invested in Xiaomi. It’s possible that influences the prices they can negotiate.

2. Like Samsung, Xiaomi has their own in-house SoC development program. Just the threat of an alternative gives them more ability to negotiate pricing.

Reply on news.ycombinator.com