Tech Transformers

Xiaomi fires shots at Apple as it launches smartphone

Xiaomi launches flagship smartphone
Xiaomi launches flagship smartphone

Xiaomi launched its Mi5 smartphone on Wednesday, using its first ever European launch event to take on Samsung and Apple handsets and build up its brand beyond its current markets.

The Chinese mobile company took the wraps off the 5.15 inch Mi5 smartphone which will cost 2,699 yuan ($354) for the top-end 120 gigabyte version and 1,999 yuan for the 32 GB handset.

Xiaomi's Mi5 will be available from March 1 in China and will roll out to the company's other markets such as India.

A few of the key features include:

  • A 16 megapixel back camera and 4 megapixel selfie camera
  • A fingerprint sensor
  • A curved back
  • White and gold models available

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The smartphone maker, which is valued at around $45 billion, has seen huge growth due to its tactic of selling low-price, high-spec smartphones and using a mix of social media and selling direct to the consumer to build its brand.

But as the smartphone market slows, particularly in China, Xiaomi is looking beyond its current markets and to the West where there is a big demand for its devices.

Xiaomi has previously signaled its intent to break into the U.S. and European market but has always declined to give a specific timeframe.

"We primarily focus on existing markets…we're beginning to work our way into other markets," Barra told CNBC in a TV interview on Wednesday.

Analysts said that Xiaomi would be looking for growth elsewhere amid slower growth in China.

"It's little surprise Xiaomi has gone for a big European launch. As the Chinese smartphone market plateaus, it is essential Xiaomi (and other Chinese phone makers) drive growth in international markets," Ben Wood, chief of research at CCS Insight, told CNBC by email.

"The big questions for Xiaomi are whether it has overcome the intellectual property challenges it has faced to date and how it builds its brand to Western consumers who will never have heard of the brand?"

Hugo Barra, international vice-president, addressed the patent issue at MWC, saying that the company filed 3,600 patents last year globally. Barra told CNBC in December that Xiaomi had filed over 6,000 patents with 40 percent of them in 2015 being filed outside of China.

The Chinese upstart currently holds a 4.6 percent smartphone market share, according to IDC, and is hoping to increase that this year with the Mi5.

During the event, Barra constantly compared the Mi5 to rivals Apple and Samsung, a feature that is often seen in Xiaomi's launches as it looks to position its brand alongside the world's biggest smartphone makers.Most of Xiaomi's success in China has been built on the ability to get users to spend money on its software and services. There are some doubts about whether Xiaomi can replicate this model abroad when it expands into western markets where Google and Apple's services dominate.

But Barra said that the sales model would be transferable globally and Xiaomi was already starting to make moves in this space.

"We'll bring this to other markets…so lot of exciting evolution ahead which will allow us to bring our internet content outside of China," Barra told CNBC.