China’s Xiaomi set to release higher-end phone

Xiaomi Note

Xiaomi released its biggest, most expensive smartphones as the Chinese manufacturer challenges Samsung Electronics and Apple at the higher end of the mobile-device market.

The 5.7-inch Xiaomi Note debuts Jan. 27 for 2,299 yuan ($371), Chief Executive Officer Lei Jun said at a press conference in Beijing today. The device is bigger, lighter and thinner than Apple’s iPhone 6 Plus and has a curved glass display, he said. A second device, the Note Pro, will sell for 3,299 yuan.

After building Xiaomi into the world’s third-largest smartphone vendor in less than five years, Lei has set his sights on overtaking Samsung and Apple within a decade. To achieve that goal, he’s investing in startups that can provide hardware, software and services that complement its devices.

“Xiaomi is elevating its Note to the next tier with a premium positioning,” said Neil Shah, a Mumbai-based analyst with Counterpoint Technology Market Research. “Xiaomi should be able to attract the bulk of the middle- and upper-middle class Asian consumers.”

China’s largest smartphone vendor said Dec. 29 its valuation was $45 billion following a $1.1 billion funding round that included investors such as billionaire Yuri Milner’s DST, Singapore’s GIC Pte and All-Stars Investment.

The company doubled revenue to $12 billion last year and committed to spending $1 billion on content as Lei tries to sell 100 million phones this year.

The Xiaomi Note “will be well-received in the market - at least markets where large-screen phones are in demand, China being one of them,” said Jessica Kwee, a Singapore-based analyst with researcher Canalys. The device also is comparable to Samsung’s Note 4, she said.

In its home market of China, Xiaomi’s current lineup includes the Mi 4, with a 5-inch display; the Redmi 2, with a 4.7-inch display; and the Redmi Note, with a 5.5-inch display.

The devices start at about 699 yuan.

The company, which has no production facilities of its own, relies on contract manufacturers such as FIH Mobile and Inventec to build its devices.

Xiaomi, which means millet in Chinese, was founded in 2010 to make software for mobile devices running Google’s Android system.

The company introduced its first smartphone in China the following year and has since branched into other electronics including tablets, routers, televisions and set-top boxes.

In addition to the new smartphones, Lei announced the 199-yuan Mi Box Mini to stream online video.

Since November, Lei has invested in online video and Internet service providers and announced that Xiaomi has also bought stakes in at least 25 startups as it looks to expand into web-enabled devices for the smart home.

The strategy has already resulted in products including air purifiers and light bulbs that can be controlled remotely by mobile phone.

Bloomberg