The Redmi Note 7 offers a feature-complete smartphone for $150. With a bill of goods that low, why are US smartphone buyers being gouged for flagship phones?
Chinese smartphone provider Redmi, which is now operating as an "independent brand" from corporate parent Xiaomi, announced the Redmi Note 7 smartphone on Thursday--a feature-complete phone with a price tag of $150.
The Redmi Note 7 features a 6.3" 2340x1080 (19.5:9) display with a pixel density of 409 PPI, with a small notch in the top-center--smaller than the notch found in the Essential PH-1--to accommodate the 13 MP camera. It includes 2.5D glass on the front and back of the phone, with Corning Gorilla Glass 5 on the front side. The rear camera is capable of up to 48 MP pictures, using a Samsung-made sensor.
The phone is powered by a 2.2 GHz Qualcomm Snapdragon 660, contains a 4000 mAh battery, and offers a rear fingerprint sensor, Bluetooth 5.0, IR blaster, a 3.5mm headphone jack, a microSD slot, and USB-C port with support for Qualcomm QuickCharge 4.0. The rear camera is a 48 MP Samsung sensor, paired with a 13 MP front camera.
Redmi is offering the phone in three colors, and with three different SKUs: 3GB RAM + 32GB storage, 4GB + 64GB storage, and 6GB + 64GB storage, with the former starting at CNY 999 ($147 USD). The phone comes with an 18-month warranty, which Redmi claims is "the first smartphone in the Chinese mainland" to have a warranty of that length, "demonstrating Xiaomi's confidence in its product quality."
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Certainly, this is a feature-complete midrange smartphone. The last Samsung smartphone to feature an IR blaster was the 2015 Samsung Galaxy S6. Samsung has continued to offer headphone jacks on Galaxy smartphones, though Apple, Google, and (briefly) Sony stopped doing so. Likewise, MicroSD card support has never been a feature of the iPhone, and only the Nexus One offers expandable storage.
Despite years of price competition from Chinese smartphones, makers of phones sold in the US feel no apparent pressure to compete. Matthew Miller pointed out the discrepancy in an editorial at TechRepublic's sister site ZDNet in 2016. Since then, smartphone price inflation has become demonstrably worse. ZDNet's Larry Dignan pointed out in October 2018 that "Apple is testing how much it can raise prices" on newly-launched products, such as the iPhone XS Max, iPhone XR, iPad Pro, MacBook Air, and Mac mini, "and the prospect has Wall Street analysts salivating." Because of Apple's vertical integration--designing both the SoC and OS used in iPhones--they are likely more immune to competition than is Android smartphone maker Samsung, which uses Qualcomm SoCs in North American and Japanese models of Galaxy smartphones.
Despite that, Apple issued lowered sales forecasts for Q1 2019, as the gambit appears to have not paid off.
In fairness, the MIUI interface used in most Xiaomi and Redmi phones has garnered controversy for displaying advertisements in bizarre places, including the settings app. While it is easy to call out these smartphones for inundating the user with advertising, these practices are not meaningfully better than app makers or mobile networks selling user location data.
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Companies selling smartphones in the US also likely have minimal fear of price competition due to mobile networks in the US leveraging different bands than phones sold in Europe or China. Unfortunately, the Redmi Note 7 uses LTE bands 1, 3, 5, 7, 8, 34, 38, 39, 40, and 41. Of those bands, ATT, T-Mobile, and Verizon support only Band 5, with Sprint supporting 5 and 41, though other network incompatibilities make the prospect of using global phones on Sprint or Verizon an order of magnitude more difficult. Likewise, the lack of official support for the Play Store in China requires modifying phones to properly support apps and services which are distributed through and have dependencies on the Play Store.
Even for companies looking to buy up bulk quantities of phones to deploy to employees with a custom ROM to overcome software issues, the amount of work required is not worth it. With Chinese smartphone vendors able to produce feature-complete, minimal-compromise phones for budget prices, the bill of goods for US-bound flagships is quite a lot lower than the price tag applied to them. As upgrade cycles become longer, it remains to be seen if corporate purchasers can apply pressure to get more favorable deals in order to simply close a sale.
The big takeaways for tech leaders:
- The Redmi Note 7 features a 6.3" 2340x1080 display, and is powered by a 2.2 GHz Qualcomm Snapdragon 660, for $150.
- Despite low prices from Chinese smartphone vendors, network incompatibilities make it challenging to use those phones in the US.
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