"There's always been talk of this fear of China. We have seen Huawei, and ZTE, been accused of spying in similar scenarios," he said. In 2012, for example, a U.S. congressional committee concluded that both companies were a national security threat for their alleged ties to the Chinese government.
In Taiwan, Xiaomi phones have been selling well, and been directed to consumers, not government officials, Lu said. "Even though people may have some concern about using a Chinese service, for most users it's not a big deal," he added.
Sign up for CIO Asia eNewsletters.