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Realme shifting towards IoT products, mobile launches to suffer?

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Realme has launched many of its IoT products amid a grand launch last week. It has launched products ranging from a toothbrush to camera tripod and whatnot. It is not so common of a mobile phone company to suddenly start launching toothbrushes or is it? Realme has launched 11 products at its last launch out of which just two were the phones. So, is the company slowly started avoiding making phones? We are going to answer all your questions in this article.

MI is the number one smartphone brand in India since 3-4 years. No company had proved to be really formidable competition for MI because of its product strategy. MI had recently claimed that they keep just 5% profit margin in their products. Oppo basically brought realme as its sub-brand to compete against the monopoly of MI in the online market. Realme, which has already become an independent brand, has performed quite well for a 2-year-old company. Realme officials have stated that they have below 5% profit margin in their products.

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According to Business studies and research, a company with less than 5% profit margin is doomed to fail. The business strategy of realme is not sustainable, to put in a few words. That is the reason why the company has shifted its focus to various other smart products to make up for its less profit margin in phones. Realme has a quite huge userbase now because of its value-oriented product portfolio. So, realme is basically milking its loyal fanbase. A realme phone user is very likely to buy realme headphones, realme smartwatch and other appliances.

That is the new business model of Realme. The 1+4+n strategy is basically a network of the phone connected to other smart products. The phone sits at the centre as the major portal, via which all other products are controlled and regulated. The four portals are the adjunct to the smartphone experience like earphones, smart speaker, smartwatch and smart TV. Then comes the large number of portals consisting of other IoT products like smart toothbrush, car charger, smart plug and so on. MI has already adopted this strategy to sustain its low-profit phone manufacture. As always, realme has copied the strategy of Xiaomi yet again.

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Manufacturing and launching a phone or sustaining a phone series is not everyone’s cup of tea. It requires a huge amount of money in R&D, launch and promotion, However, it’s not the same for other realme IoT products. The company can just slap its logo to existing product design, do some minor changes and bring it to the market. Even if they design themselves, phone accessories are easier and last for a longer time in the market.

Phone companies like Motorola, OnePlus, MI, Nokia, Realme have already brought their smart TVs in the market. MI has even started making laptops! In coming days, other OEMs including realme will follow. They know that once they have established their loyal fanbase, it is very easy to sell their accessories to them. They are basically diversifying their income sources to sustain selling aggressively-priced phones. What do you think of this strategy of brands? Do you think it is good for us as the end-consumers?

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