Xiaomi: Give Away the Hardware

Founded in China in 2010, Xiaomi sells high-specification smartphones at prices that hover near the cost of building them, undercutting Apple and Samsung by design rather than by accident. Every phone runs the company's MIUI software, and every device feeds a sprawling Mi ecosystem of air purifiers, scooters, smart lights, and hundreds of partner products, all funneling users back into one platform of apps, services, and data. The hardware loss is the entry ticket, not the business.

For founders and operators, this case sharpens a pricing decision most companies never let themselves consider: when can you deliberately surrender margin on the thing customers came for? It surfaces the conditions under which that bet pays off and the real risk that can sink it, without telling you where the line sits. You will think harder about what you could monetize downstream from your own core product.