China Exclusive: Xiaomi spotlighted ahead of fifth anniversary

The buzz over whether Chinese smartphone up-and-comer Xiaomi can outshine global leader Apple reached new volumes as the company unveiled it's latest line of products ahead of their fifth anniversary on Monday.

China's leading smartphone vendor Xiaomi unveiled the Mi Note pink edition on Tuesday, a fashion device which is geared toward ladies, along with four other new products, including Red Mi 2A, Mi TV 2 and the new Mi Power Strip.

The move came six days ahead of Xiaomi's fifth anniversary on April 6 and on the eve of Apple's 39th anniversary on Wednesday.

However, Xiaomi's celebration was somewhat stunted by the news that Apple has usurped Xiaomi to become the best-selling smartphone brand in urban China.

For the three months ending in February 2015, the top three best-selling smartphone models in China were Apple's iPhone 6, the Xiaomi Red Mi Note, and iPhone 6 Plus, according to latest data from Kantar Worldpanel ComTech, a consumer research firm.

Meanwhile, iPhone 6's market share has increased to 10.2 percent from 9.5 percent registered in the three months ending January, with overall ios smartphone sales have reached a new record high of 27.6 percent.X Tamsin Timpson, strategic insight director at Kantar Worldpanel ComTech Asia, said Apple was able to grab the top spot not only because strong sales in its two flagships, but also the older models.

Despite Apple's strong performance, clues about Xiaomi's retreat from the top spot can be found through feedback of its fans.

While several women on microblog Weibo expressed excitement over Xiaomi's latest release, several were disappointed because of the pricing and quality.

One user, "Dearyouaremyonly", said the new Mi Note is "eye catching, but expensive", coupled with a crying emotion, while another user said she can only afford the Mi Power Strip after taking a look at the prices.

Titled the Mi Note Chinese edition with a codename of Goddess smartphone, Xiaomi failed to gain recognition from Weibo subscriber "Fanhua, shimeng" who commented that Goddess-like girls all use iPhones.

Although dubbed as the "Apple of China", the quality between Xiaomi and Apple are still worlds apart, with iPhones generally considered better in areas ranging from the operating system, core technologies to prices, sales and targeted consumers.

Currently, Xiaomi uses Google's Android operating system, which is more PC-like and less user-friendly than Apple's ios system.

Apple's patents were nearly double the quantity of Xiaomi as of Dec. 21, 2014, the patent search and service system of State Intellectual Property Office of China showed.

The price for the Mi Note and the Red Mi 2A is 2,499 yuan (about 407 U.S. dollars) and 599 yuan respectively, much cheaper than the 5,288-yuan iPhone 6 and the 6,088-yuan iPhone 6 plus.

Given such big price differences, some analysts say their consumers are different market segments. Their competition is compared to the rivalry of mass consumer products and boutique producers.

However, it is from the mass consumers that Xiaomi has benefited the most in the global market. According to IT research firm Gartner, for the fourth quarter of 2014, "out of all of the global smartphone makers, Xiaomi saw the largest jump by tripling its sales compared to a year ago."

Xiaomi shipped 18.6 million smartphones in the 4th quarter last year, behind homeland competitor Lenovo's 24 million and Huawei's 21 million.

Meanwhile, Apple sold 74.8 million iPhones, slightly higher than Samsung's sales of 73 million smartphones. Apple had become the world's largest smartphone manufacturer again.

The reason why high-priced iPhones sell the best is because their high quality, according to Wang Guanxiong, an Internet analyst.

Nevertheless, industry experts believe Chinese smartphone makers are narrowing the gap with foreign giants.

"China is doing well on home-grown smartphone core technologies including chips and operating systems. Xiaomi, Huawei and Alibaba invested huge on operating systems. Home-made smartphone makers depend less and less on foreign giants," said Ni Guangnan, a member of the Chinese Academy of Engineering.

Huawei spends 10 percent of its revenue on research and development(R&D) each year. Xiaomi never published its R&D spending. Apple spent nearly 2 billion U.S. dollars on research and development in the first fiscal quarter of 2015, an increase of 42 percent year on year. Endi