Taking a bite out of Apple

IT FEELS more like a rock concert than a press conference as the casually dressed chief executive takes to a darkened stage to unveil his firm’s sleek new smartphone to an adoring crowd. Yet this was not the launch of the new iPhone by Apple on September 10th, but of the Mi-3 handset by Xiaomi, a Chinese firm, in Beijing on September 5th. With its emphasis on snazzy design, glitzy launches and the cult-like fervour it inspires in its users, no wonder Xiaomi is often compared to its giant American rival, both by admirers and by critics who call it a copycat. Xiaomi’s boss, Lei Jun (pictured), even wears jeans and a black shirt, Steve Jobs-style. Is Xiaomi really China’s answer to Apple?

Xiaomi sold 7.2m handsets last year, in China, Hong Kong and Taiwan, earning revenues of 12.6 billion yuan ($2.1 billion). Apple sold 125m smartphones globally, earning about $80 billion of its $157 billion sales. But since it was founded in 2010, Xiaomi has grown fast. A recent funding round valued it at $10 billion, more than Microsoft just paid for Nokia’s handset unit. That made Xiaomi one of the 15 most heavily venture-backed mobile start-ups ever, says Rajeev Chand of Rutberg, an investment bank. In the second quarter of 2013 Xiaomi’s market share in China was 5%, says Canalys, a research firm—more than Apple’s (4.8%) for the first time.