With pricing in a range between $669 and $749, one might think that OnePlus is only making a few bucks on each OnePlus 7 Pro that is rung up. The manufacturer's margins must be restaurant thin, right? Wrong. A leaked image posted on Weibo (via GizChina) allegedly reveals the cost of the materials used to build the 6GB/128GB version of the OnePlus 7 Pro. If the list is legit, the AMOLED panel purchased from Samsung is the most expensive part of the device, costing OnePlus slightly over $80 for each screen. The rear-facing triple camera setup (48MP primary + 8MP telephoto with 3x optical zoom + 16MP Ultra-wide) costs OnePlus $27.29 for each unit. The 6GB LPDDR4X RAM chip is priced at $26 while another $20 secures the 128GB storage component. The Snapdragon 855 Mobile Platform isn't cheap either. In fact, after the display, it is the most expensive part of the phone at $70 a pop.
How Xiaomi manages to keep its profit margins on phones at 5% or less
keep its net profit margins at no higher than 5% on any given handset. Company founder Lei Jun said last year that if a particular phone produces greater than a 5% profit margin, Xiaomi will find other ways to compensate its customers. Back in 2015, former Googler and ex-Xiaomi CEO Hugo Barra explained how the company keeps its margins so low. First, it prices its devices at cost but gives it a long shelf life. This way, as component prices drop over the life of the device, Xiaomi can cut prices and still turn a profit. Barra said that over the 18 to 24-month life of a Xiaomi phone, the product might see its price cut three or four times.
NOTE: In Australia, at the time of this post the 265GB version of the iPhone XS Max, is sold for $2049 from the popular retailer JB Hi-Fi.
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