China’s Xiaomi aims for Apple’s iPhone with Mi 5S Plus smartphone launch

The 5.7-inch Mi 5S Plus smartphone is the Chinese startup's most powerful device, sporting one of Qualcomm's speediest processors as well as 6 gigabytes of memory.

Xiaomi is the world's fifth-largest smartphone maker, shipping 15.53 million units in the second quarter this year. Ren weihong

Xiaomi took the wraps off its strongest contender yet to the iPhone, a 2,599-yuan plus-sized device with dual cameras and a pressure-sensitive screen that is less than half the price of Apple’s top-of-the-line model.

With the 5.7-inch Mi 5S Plus, Xiaomi, once known as a purveyor of inexpensive but innovative phones, is taking aim at fans of premium devices. It’s the Chinese startup’s most powerful device, sporting one of Qualcomm’s speediest processors as well as 6 gigabytes of memory. With a screen that detects varying degrees of pressure – much like Apple’s 3D Touch – and 13-megapixel cameras, it stacks up well against the iPhone in the specifications department.

Xiaomi needs a hit. It’s slipped behind Huawei and Oppo in a home market it once dominated, while efforts to make headway in Latin America and India have stalled. Samsung’s global recall of the Note 7 opens a window of opportunity not just for Apple, but also for Xiaomi to try and wrest market share away from the global leader.

“We were aiming to challenge Samsung and Apple in camera capability. With the Mi 5S, I believe we beat both of them,” co-founder and chief executive Lei Jun said at a launch event in Beijing at which it also introduced a 65-inch, 4K smart television.

Apple is counting on the latest iteration of its flagship product to regain the top spot in China, its largest overseas market. But unlike in years past, the iPhone 7 offers little that resonates with Chinese consumers: no affordable models such as the SE or 5C, a radical redesign, or features that truly push the technological envelope. Investors speculate iPhone 7 sales may even lag last year’s, depressing its stock.

The new iPhone does feature a water-resistant design, upgraded camera and faster processor. The larger Plus model sports a back-facing dual camera that allows for crisper images, particularly in low light. It also comes with a pressure-sensitive Home button that provides a vibrating sensation instead of a click. The bigger version goes for more than 6,000 yuan in China.

Xiaomi is following Huawei and Oppo into the higher end of an intensely crowded Chinese smartphone market, encroaching on Apple’s traditional sweet spot. That will be key to shoring up margins as Xiaomi – which missed its 2015 sales target – continues to develop and put out products like TVs and robot vacuums in a gradually easing economy.

“The price tag of the Mi 5S Plus made the device very competitive. With all the upgrades, the device is only a few hundred yuan pricier than the Mi 5. We think the new product will be very popular,” said Nicole Peng, China research director at Canalys.

The Mi 5S Plus and the smaller, 1,999 yuan Mi 5S go on sale September 29, though not in the US. The company, whose plethora of products include rice cookers, is preparing to enter the American market by employing the same online sales and social media marketing that helped the six-year-old company become China’s largest privately funded startup.

While it has not specified when it will move into the US, the smartphone vendor is in a better position these days to launch an incursion onto Apple’s turf. In June, the Beijing-based company announced the acquisition of nearly 1,500 technology patents from Microsoft – a deal that may smooth potential legal tangles over intellectual property as it pushes abroad.

Back home, Xiaomi’s taking another page from the US company. It aims to open hundreds of stores in coming years, adopting an approach that’s helped not just Apple but also local rivals like Oppo.

“Xiaomi already has a strong online sales channel, but we are also trying hard to build our offline sales network so more customers can try out our products in real life,” Mr Lei said.

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