It has been a couple of weeks since Xiaomi’s sub-brand POCO took wraps off its first smartphone POCO F1. It is currently the world’s cheapest Qualcomm Snapdragon 845 powered phone with a starting price of Rs. 20,999 (about $290). This pricing has left everyone including users, critics, and competitors surprised. While OnePlus did exactly the same with the OnePlus One in 2014, POCO has managed to do the same even four years later. And if you are wondering how it did so, here is the answer.

Jai Mani, POCO’s Head of Product, told Android Central that when the team started to think about making a new smartphone that would disrupt the market, they set a price goal of Rs. 20,000 (about $300). The next step was to bring down hardware costs while making sure that there is no compromise with the quality or final user experience.

This is the reason that team initially wanted to make use of AMOLED display panels but eventually had to go with LCD panels. They further rejected using NFC which is not a big deal in the India market. The next choice was to go for polycarbonate back instead of offering a metal-glass design.

Such decisions are acceptable when any brand is aiming to deliver a higher-specced phone at a much lower price than the market standard. It is something almost any brand can do if it wishes to but overcall phone cost tends to go high once the execution process starts which includes bringing in components, assembling them, and eventually releasing the phone in the market through the distributor network. This is where the Indian market leader Xiaomi came to POCO’s rescue and helped them prevent the cost going over the set goal.

POCO made use of Xiaomi’s existing infrastructure which reduced the R&D cost. They used Mi MIX 2S’ 12-megapixel IMX363 rear camera module and Mi 8’s infrared-based face detection module as well 20-megapixel front camera module. The support from Xiaomi further helped them procure very large units of Qualcomm Snapdragon 845 chipset, LPDDR4X RAM, and UFS 2.1 storage at a “great” rate.

Xiaomi also helped POCO with the logistics and distribution situation as the latter is making of former’s supply chains. As for the last piece of the puzzle which is providing customer support, POCO is again using Xiaomi’s existing service centers which are said to be over 1,000 around the country.

To sum everything up, POCO started off by making crucial cost-saving decisions and then combined it with the support of Xiaomi to bring a smartphone that costs equivalent to a mid-range phone but performs like a flagship.

Buy POCO F1 (starting Rs. 20,999)