The Xiaomi 12S Ultra sells for $890, but only costs $516 to make

Hadlee Simons/Android Authority

TL;DR

  • The Xiaomi 12S Ultra would cost $516 to manufacture.
  • Xiaomi’s device launched in China for around $890.
  • However, this does not reflect the other costs associated with a smartphone.

The Xiaomi 12S Ultra is the company’s flagship for 2022, packed with features and 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 ​​the manufacturing cost.

Counterpoint Research has done a BOM analysis of the Xiaomi 12S Ultra, saying the base 8GB/256GB model costs $516 to manufacture. The tracking company says the processing, display and camera subsystems accounted for nearly two-thirds of the cost.

Xiaomi 12S Ultra BOM counterpoint search

That doesn’t mean Xiaomi earns $374 on every 12S Ultra sold, though, as the BOM doesn’t take into account costs like 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 release of the 12S Ultra mean for that profit margin cap? Well, the release of the Mi 11 Ultra last year might give us an idea, as it was the company’s first high-end flagship phone.

“We will still maintain an overall profit margin of 5% across all of our hardware businesses,” the company previously told us when we asked about the profit margin cap following the launch of the Mi 11 Ultra l ‘last year.

The statement suggests that there is some leeway 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%.

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