"But if tomorrow Xiaomi raise their price to Apple levels, they won't sell. They're trying to build that brand equity by comparing themselves to Apple."
Founded in 2010 by Lei and seven others, Xiaomi seeks to cut costs by eschewing brick-and-mortar stores in favor of web-based distribution and word-of-mouth marketing.
Xiaomi became the world's sixth-largest smartphone vendor in the first quarter of 2014, according to data firm Canalys, after repeatedly doubling its sales. The company was valued at $10 billion last year, drawing industry speculation that the fast-rising company could threaten Apple and Samsung, which dominate the premium market.
Xiaomi sold 18.7 million smartphones in 2013 and on Tuesday maintained a 60 million sales target for 2014. For comparison, Huawei Technologies Co Ltd [HWT.UL] has said it is targeting 80 million smartphone sales for the year.
($1 = 6.2025 Chinese Yuan)
(Reporting by Paul Carsten and Beijing newsroom; Editing by Erica Billingham)