China's smartphone market changes dramatically

BEIJING - When iPhone frenzy gripped China in late 2010, it seemed unlikely a Chinese smartphone brand could compete with global giant Apple, let alone surpass them in sales.

But in the first five months of this year, Chinese-born smartphone brand Xiaomi has done just that, taking the market and Xiaomi's founder and CEO Lei Jun by surprise.

According to a report released on July 31 by UK-based market research company Kantar Worldpanel Comtech, Xiaomi's sales in major Chinese cities reached a pre-tax revenue of 33 billion yuan ($5.36 billion) in the first half of this year, earning the company an overall market share of 21 percent and inching them closer to market-leader Samsung, who maintain 23 percent.

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By comparison, Apple Inc occupies 16 percent of the Chinese smartphone market.

"No one could expect (Xiaomi) to become a top mobile phone brand in China in less than three years after (we) unveiled the first mobile phone," Lei said to Xiaomi's fans in a letter posted on his social media account last month.

Xiaomi Inc, who's name translates into the grain 'millet', was founded in April of 2010 by Lei and his friends in Zhongguancun, Beijing's technology hub dubbed China's Silicon Valley.

On Aug 16 of 2011, Xiaomi's first smartphone debuted quietly, selling a healthy, but unremarkable 10,000 smartphones in the first month.

In the first half of 2014, Xiaomi shipped 26.11 million units, enjoying growth of 271 percent from the previous year. Sales revenues from the first half 2014 marked a year-on-year growth of 149 percent.

The balance of power in the Chinese mobile sector can change incredibly quickly. According to Kantar, Chinese consumers tend to switch brands far more often compared with other global markets.

But Xiaomi frenzy is showing no signs of slowing. In the second quarter of 2014, the company secured a 27-percent share of smartphone sales, compared with 21.1 percent for Samsung, according to data from Kantar.

Their latest model, Xiaomi RedMi, which was introduced last July, continues to attract new Chinese customers and their soon-to-be-released Xiaomi Mi4, was announced recently.