Redmi Note 7 is set to launch in India and based on the interest that we've witnessed in the smartphone ever since it was unveiled in China last month, it looks like Xiaomi has another winner on its hands. The Chinese company has gone from an upstart to India's leading smartphone brand in very little time, and with the Redmi Note 7 Xiaomi would hope to continue the winning streak. The company's formula so far has been to offer competitive specs at a killer price that leaves little room for users to complain about.

With that said, one of the complaints that we — and many others — have had about Xiaomi's recent offerings is the ubiquitous nature of ads. If you've paid close attention to our reviews, you would've realised that it seems that you can't use a Xiaomi smartphone for too long without bumping into ads. Feedback that we've received from Gadgets 360 readers echoes this observation and it's no surprise that this guide on how to remove ads from MIUI is one of our most popular stories in recent times.

Gadgets 360 Editor-in-Chief Kunal Dua got a chance to quiz Xiaomi India MD Manu Kumar Jain on a wide variety of subjects, and while we obviously asked Jain about the Redmi Note 7 India launch plans, we also discussed many other subjects. One of the things we touched upon was the prevalence of ads in MIUI, and we started off our discussion on the subject by asking Jain a tongue-in-cheek question if the company plans to offer an "in-app purchase" that would let people get rid of ads in MIUI without jumping through hoops.

Here's the full-transcript of our chat on the subject, with minor edits for clarity.

Kunal Dua: One of our complaints — and we hear this from the users also — is ads on practically all your phones. Any plans to offer an “in-app purchase” where people can pay extra and not see those ads or something like that?

Manu Kumar Jain: First of all, thank you for asking this question. I've been wanting to talk more about this publicly, and I truly believe we've been misunderstood and misquoted on this particular topic. So I just hope I can take few minutes and clarify to you what we are we doing and what is the stance on this, right?

So, we have something called as Internet services. Now, what are these Internet services? There are three kinds of internet services that we have. One kind of Internet service are services which are built within OS. Like when you get an SMS from Vodafone or HDFC Bank, you will never reply to them saying “thank you HDFC Bank for sending a message and I have received your message”.

So, we have removed that reply button and we have put buttons below where you can go and find nearby ATM, purchase an insurance plan from HDFC, or you can go to the HDFC site and do some transaction. There is some commercial arrangement between us and many of these service providers where if they get extra money, they pay a part of that money to us.

KD: So, you do this only with select banks?

MKJ: We do with most of the banks, but we may not have commercial relationship with everybody.

KD: But you will still show the buttons for everyone?

MKJ: Yes, for [Indian] Railways [for example], Railways doesn't pay us money for checking PNR. But we have still made it very convenient. Whatever is the most logical step, like in case of Vodafone, you probably need to top-up your plan if you are a prepaid customer. So, we have inserted that button. For Railways you would need to check your PNR status, right? These are all services which are integrated within the OS.

Like if you swipe left to our App Vault, you can book an Ola Cab from there without having an Ola app which is of great convenience for value. If you have a picture, you can print that picture using Zoomin through app vault. Now, these are services which are built within OS, right?

Second is just the value added services that we have. These are things like Mi Video, Mi Music, Mi Drop, which is our file sharing app. A lot of these value added services we provide to users which is not core to the working of phone but they have similar kind of apps.

Like you have YouTube, we have Mi Videos. You have Wynk, you have Gaana, you have many other music apps, you have Mi Music, right? You have ShareIt, we have Mi Drop. And some of these services are really good. Like Mi Drop, I told you we crossed 100 million downloads in just one year of launch and with a rating of 4.8. 100 percent clutter free.

Now if you look at all these similar services, similar other video apps, music apps, they would be showing ads to make money. Like how does YouTube sustain? They have a lot of expenditure by showing ads before they play a video, right? For all these value-added services, we will need some sort of way to make money so that we can sustain it.

Like we are showing 7 lakh hours of content on our Mi Video app, how do we sustain that? Mi Drop requires a lot of big server capacity and many other things, so it's huge cost of running operations. Till now, we have not monetised Mi Drop or our Themes app. We pay developers to create themes for users but we give it to users for free. So, how do we continue to incur cost on our Themes app?

Now, there could be two ways here, either we charge a subscription fees, like how other music apps, video apps do it, and then we say it will be ad free, or we basically show ads in these value added services.

Third are the core functionalities, like what we have is a core OS. Like Dialler app, our SMS app, right? Or like dual apps that we have, right? A lot of these are the cool features that we basically built. So, the one way we are we want to make money is through this within OS integrations. But these are not ads, these are like those kinds of services that I said, you can print a picture, right, or you can go and go to the nearest Vodafone store or Airtel store, you can top up your plan.

And we try and make small-small-small amount of money through these Internet services. Second way right now for these value added services, are the only places where we put ads, even not through all of them, like Mi Drop doesn't have ads. And we put ads in these value added services because we really want to make them free. But in future, I think one of the big pushbacks that we keep hearing is can we have a subscription model for these value added services so that we can keep it free. So, we'll definitely consider it.

For these core apps, we never ever touch them, except for one mistake that we had once, and which was blown out of proportion. Apart from that we have never ever touched and we will never ever touch our core apps.

Things like Gallery, Camera, Phone, Contacts, SMS, like all these kind of features, right that are core to the working of a phone, which is what the phone is meant for, right? All those core apps, we will never ever touch for any ads or any kind of monetisation. Those places we will not show ads.

The only places where we show ads are these value added services plus we monetise some of the features which are built within the OS.

KD: What about notifications? Especially from the browser are a big problem, right? Because from what you are telling me it seems that there is no problem. That's what you seem to be suggesting.

MKJ: For value added services, we do ads, but we can, first of all, these ads can be switched off by respective user. Point number two, we will, if you think we should or if the users think we should think of a subscription model, because it's a genuine cost of running operations for Mi video, just like YouTube. If YouTube show ads, then we may also show ads — either we basically make a paid version of Mi Video or we basically show ads to keep it free.

Like for example ShareIt vs Mi Drop. ShareIt and Mi Drop are competitors, right, and ShareIt does show ads, we do not. And we have tried to keep it free as much as we can, till the time we can sustain it. But if the cost of running operation becomes exorbitantly high over a period of time because our number of users are growing, then we may have to incur, figure out a way to monetise it so that we can independently run that service free of cost.

KD: Where does the browser fit into this? Because browser like I said is is a major source of annoyance.

MKJ: Umm.. on browser, what is the pain point that you have?

KD: You also get unwanted notifications and ads even via the browser.

MKJ: So on the news feed of.. the browser we have a news feed, just like any other browser including Google or Chrome or anybody else that you can think of..

KD: But they don't notify you, right? It's there when you see it. Like when you login, you might stories, but you don't actively get notifications from any other browser.

MKJ: I will check this one.

KD: Because that I understand is the biggest pain. I understand Mi Music, Mi Video, you are actively trying to view content, I think if you see ads, I don't think that should be an issue.

MKJ: I don't think we do push notifications for ads [it's content].

KD: Even if it's content, it's not something I have actively opted in. Somewhere in settings you might have by default signed me in and I am sure I can go through a tutorial and figure out how to unsubscribe from that. That is one of the things [that's a problem] — you are using the phone, and the phone is constantly pinging you with stories…

MKJ: To the best of my knowledge, I don't think we have done any ads in notifications or any ads through our browser notification specifically if that is your question. But if we have done push notification to promote some content which is there, so, first of all there is a team monitors the content, the quality of content, and if you think that is a problem, we can of course make it much easier to enable, disable it.

Like some people would like to have this is very similar to like how I if I go to any of the apps or websites, today, the first thing that they show is basically they say, whether I want to keep getting push notifications or whether I want recommendations or not. And I keep clicking saying no or whatever. It's my personal choice. But assuming a lot of people who actually want this notification because they would want to be keep updated. So maybe we can make it more [easier to unsubscribe]. Even now it is in the hands of users.

KD: Yeah, I think but they are I think opted in by default right now.

MKJ: Sure, so so we can make that very conscious where you say yes or no.

KD: There are some other apps that I can see right now which also have ads which is Mi Security, which I don't know which category [that you mentioned above] it falls [in], the Cleaner app, the Mi Downloads app. The Music and Video I understand but again why the Downloads app or Mi Security? Why do you think they need to show ads.

MKJ: We, of course, incur a pretty high cost in running some of these services.

KD: But that's why I am saying why don't you let them spend another 499 per year or like a one time purchase and say, okay, no more ads for you.

MKJ: It is not a bad idea, what you are proposing. I don't think we have evaluated it so I won't be able to comment on it right now. But maybe, if a lot of people want to do something like this, even today, by the way, for each of the app, they can go and they can [disable ads].

KD: Yes, I have seen the tutorial, there are like 13 different apps the user can go to, and disable ads, but that's what I am saying — from an end user's perspective it is not a great experience.

MKJ: Sure, so, right now the, even today, every, for every single app, the user can turn it off, turn it on. But your, I think your suggestion is that can we have one single sign in, I think that's what you are meaning and you pay like Rs. 200 or Rs. 500 or whatever.

KD: That's for you to figure out, but it seems like right now, even though I've bought the phone, I'm not in control of the hardware, it's still Xiaomi's phone.

MKJ: No. That's not true, I think that's a little bit of exaggeration. But of course, only for keeping the services whatever services where we incur money and which are like really not the core system apps. Over there for us to keep the services running, like cleaner apps, security apps, of course there's a cost of running these services.

Mi Cloud we actually provide Mi Cloud free of cost upto a certain limit to our users. So a lot of these, because there is cost associated with this, that's why we basically try and monetise some of them, not all of them.

KD: For example, there is this Kindle model — I don't know if you are familiar — Amazon sells two kinds of Kindles. There is one with ads, and if you spend a little extra you buy the ad-free version.

MKJ: Sure, I think that's a good suggestion. I was speaking to somebody else a few days ago. He or she also had a similar idea. Maybe we can consider it.

KD: I think it's now becoming an industry wide thing. I think you guys set the trend and everybody is following that trend.

MKJ: Actually no, that's not true. There were other brands who had ads. We were probably the first one who openly spoke about it. And sometimes I feel bad that while there were other brands who were inserting ads, because they never spoke about it, nobody blamed them. Because we openly spoke about our Internet service business and then people got confused and said Internet service is equal to ads because that's how most of the companies have done it. They started blaming us for ads. And you know how some of the times social media works, that it becomes a trend. And one person complains and cribs about it, everyone…

KD: No, it's not just that. In the past few reviews, it's been like a constant theme — ads, ads, ads — and in fact it's been listed as one of the few cons of your devices in the last year or so. So, then it starts to become like a theme for sure.

And yeah obviously, I think once — I would agree — that once we remember it was there in the previous device when we are actually using the device and then maybe even if we come across two ads then we are like “Arey, dobara ad aa gayi!”.

MKJ: So I think the two mistake that we did, or not really mistake but the reason why it happened. One, we spoke about our Internet service business openly that nobody else did. Maybe the others did not have it or even others when they had ads or whatever, and I know many brands which had it much before us because I used to use their phones before I joined Xiaomi.

One, we spoke openly about it. Second, I think the mistake that we did that is people started speaking about it even though we corrected some of the mistakes that we had done or the accidental mistakes but we never spoke about it very openly the way that I am speaking to you right now explaining which are the Internet services, which are the value added services where you can see ads like music, whatever, all these things, and which are the ones which will not have ads.

Because of which, people started assuming that if I am seeing an ad in Mi Music, which is similar to any other music app — now I will ask you, is there any other music app in the country which does not show ads. Of course they will show ads because they are paying for the content. It's a cost associated with running that business. So everybody shows [ads]. Now the only difference is when you use any other third-party app, you by default assume it's ok to see ads.

KD: But they also give you the option to pay and make those ads go away...

MKJ: I can tell you 5 other music apps right now that I personally test out. Every single one of them, their free version has ads. But when you see a Mi Music ad, all of a sudden your assumption is this is a Mi service by Xiaomi and hence it should be free without ads.

But the only explanation that I would want to explain through you to all our users is for all the core services, there are no ads, but for value added services like music video etcetera, we would like to make some money through some way so that we can continue to run these services.

And it's our core business model. Core business model is not to show ads. Core business model is to provide these Internet services, right? And if you are not able to build these Internet services and they are loss making, as a company we never make losses. We are, at the end of the day, we a business, so we have to make profits, right? Not huge amounts of profits, small profit, but still profit.

So we would want to build more and more Internet services which are helpful for users. Some of these Internet services — because they require cost of running operations — we would have to monetise them in some way either through a chargeable basis or through ads or through some sort of partnership.

KD: For you the core apps are only phone, camera, and couple of others?

MKJ: So I can we can send you the list, right? We can tell you more but all the thing which are like the core to using phone like Gallery, Camera, SMS, Dialler, Contacts, all these things which are like the core system apps, of course, all of those will not have ads. (Editor's note: Despite multiple requests after the interview, Xiaomi hasn't shared the full list of these core apps with us.)

KD: Everything else, even like a Download, or a Cleaner, etcetera, is a value added service, as per you?

MKJ: They are not really value added services but, of course, there is a Internet service that we provide on top of it. Like virus scan, these are things that we provide.

Are MIUI ads a big problem on the Xiaomi Redmi Note 6 Pro? We discussed this on Orbital, our weekly technology podcast, which you can subscribe to via Apple Podcasts or RSS, download the episode, or just hit the play button below.