Chinese smartphone maker Xiaomi unveiled the country’s cheapest 5G-compatible smartphone on Tuesday as the company seeks to revive its image as an affordable handset brand in the 5G era.

Why it matters: The world’s fourth-largest smartphone maker is looking to offset slowing hardware sales by taking advantage of momentum promised by the impending launch of ultra-fast 5G internet.

  • The Beijing-based company has seen its share prices tumble in the past year as it faces stiff competition from rivals such as Huawei and Oppo in a saturated global smartphone market. Its market share in China declined by 20% year on year in the second quarter while Huawei’s share surged 31%, according to market research firm Canalys.
  • Worldwide smartphone shipments fell 2.3% year over year in the same period, the seventh consecutive quarter of decline, according to research firm IDC.
  • Consumers are still lukewarm about the technology, with 5G smartphones accounting for less than 1% of mobile phones sold in August in China though nine 5G devices are being sold in the country.

Details: The Mi 9 Pro, which debuted on Tuesday at an event in Xiaomi’s headquarters in Beijing, will start at RMB 3,699 (around $520), significantly cheaper than any other 5G smartphones launched in the Chinese market.

  • The handset boasts Qualcomm’s Snapdragon 855+ processor, featuring up to 8GB RAM and 512 GB storage.
  • Pre-sales will begin 5 pm Tuesday and shipments to Chinese consumers will begin on Friday, according to company founder and CEO Lei Jun.
  • The company also announced its newest model, a concept smartphone called the Mi Mix Alpha. The “surround screen” smartphone features a display that curves entirely around the device, leaving only a slender bar on the back to house the camera modules.
  • Xiaomi says it is looking to start small-scale production for the 5G device at the end of December and it will hit the market with a RMB 19,999 price tag, though no date was specified, according to a statement the company sent to TechNode on Tuesday.

“This year is the initial phase for 5G smartphones, and the costs for them are higher, that’s why the Mi 9 Pro is more expensive than the Mi 9. Please understand!” (our translation)

—Lei Jun, Xiaomi founder and CEO, at the Xiaomi 9 Pro launch on Tuesday 

Context: Xiaomi launched its first 5G smartphone, the Mi Mix 3 5G, in February at the Mobile World Conference in Barcelona, Spain. The EUR 599 (around $658) device went on sale in Spain and Italy in May but hasn’t arrived at its home market yet.

  • Smartphone makers including Huawei, Xiaomi, ZTE, and Samsung are all selling 5G smartphone models in China. Before the Mi 9 Pro, the cheapest 5G smartphone in the Chinese market was the RMB 3,798 iQOO Pro 5G, while Samsung’s Note 10+ 5G is the most expensive at RMB 7,999.
  • Experts expect (in Chinese) that prices for 5G handsets will fall as low as RMB 1,000 by 2020.

This story has been updated to include the Mi Mix Alpha announcement and to correct the name of the Mi 9 Pro.

Writing about semiconductors and telecommunications.

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