It's unclear how much of a profit Xiaomi is making, but it's in startup mode and focused on drawing customers to its products. It does its best to monetize that user base by selling software and virtual goods through devices, much as Amazon does with its Kindles.
Xiaomi's CEO wants the company to be an international brand that Chinese people can be proud of. Earlier this year it announced it plans to expand in 10 foreign markets including Indonesia, Russia and Brazil.
That means the same business model that made Xiaomi a success in China will be put to the test on a global scale. It's not using the Xiaomi name much outside China, though, opting for simply "Mi" instead. The handsets are already selling like hotcakes in India: This week, an executive bragged that the latest batch of 20,000 phones sold out there in 2.4 seconds.
Sign up for CIO Asia eNewsletters.