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Xiaomi leads Asia's low-cost smartphone drive

SINGAPORE--Xiaomi may be little known outside China, but the fast-growing smartphone maker is at the forefront of a new wave of Asian brands challenging the dominance of Apple and Samsung with high-spec, low-price phones.

In the three months to March, Xiaomi surpassed Apple and other established Asian players such as Huawei and Sony to become the third largest smartphone brand in China by market share, research firm Counterpoint Technology said.

Samsung holds the top spot at 18 percent, followed by homegrown Lenovo with 12 percent.

The Beijing-based tech upstart sold 18.7 million phones in 2013, and is targeting sales of 60 million this year and 100 million in 2015.

Using a high-tech but low-cost sales model, Xiaomi aims to tap into a vast market of budget-conscious young Asians who want the newest in smartphone technology.

Technology research firm IDC said in a February report that cheap smartphones would be a key driver of sales in the low-cost segment of emerging markets outside China.

Handsets selling for less than US$100 accounted for nearly half of mobile sales worldwide, with two-thirds of those priced under US$50, its research shows.

Cost-conscious Youth

“Asian markets have burgeoning young populations who want the latest smartphone technology, but (they have) restrictive budgetary constraints,” Mykola Golovko, senior consumer electronics analyst at research firm Euromonitor International, told AFP.

Euromonitor data in 2013 showed that this key market of 15-34-year-olds made up between 25 percent and 40 percent of the population in countries such as Malaysia, Vietnam, Indonesia and China.

Unlike its giant rivals, Xiaomi has minimal advertising and no retail outlets which help keep costs down.

Instead, it has gathered a cult-like following on social media, including China's Weibo.

Most consumers — dubbed “Mi fans” by Xiaomi — buy their phones directly via its website during regular “flash” sales.

Xiaomi, whose name means millet in Mandarin, is looking further afield and poached former Google high-flyer Hugo Barra to lead its international expansion.

The firm caused a mini-frenzy in Singapore in February when it began its global roll-out under the watchful eye of Barra.

Xiaomi phones, boasting processors and sleek designs that rival top Samsung models and using the latest iteration of Google's Android software, are sold at a fraction of the price of a Samsung Galaxy S5 or iPhone 5s.

Its low-end Redmi retails at SG$169 (US$135) compared with SG$388 for the Samsung Galaxy S3, which has comparable specifications.

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This photo taken on Thursday, May 8 shows Hugo Barra, Xiaomi's global vice president, speaking at the Startup Asia technology conference in Singapore. (AFP)

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