Chinese iPhone Rip-Off Threatens Original

A knockoff of Apple's iPhone is posing a threat to the genuine article in the Chinese smartphone market.

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In August this year, Lei Jun of Chinese smartphone manufacturer Xiaome unveiled the product, dressed in a black polo shirt, blue jeans and black canvas shoes in a presentation evidently aping those of Apple founder Steve Jobs.

Lei, who is said to admire Jobs and Apple, decided to follow the business strategy of the Cupertino, California-based company when he started his own firm three years ago. Banking on the popularity of the iPhone in China, Lei manufactured a similar product and sold it much cheaper.

The iPhone knockoff costs US$320, half the price of Apple's iPhone 4S. Chinese vendors describe Xiaome's smartphones as "Chinese iPhones" and "Apple's little brother".

Lei's strategy proved a success. After unveiling its first smartphone in August of last year, Xiaome projects sales to total 7 million units this year, generating 10 billion yuan in profit, according to the IHT. In June, major venture capital investors valued Xiaome at $4 billion, half the value of Nokia.

China's smartphone market is expected to overtake the U.S'. this year to become the world's largest. The Chinese firm has done more than simply copy Apple. Xiaome listens intently to the needs of customers and applies that information to products under development. "Apple has displayed an arrogant attitude that it does not need feedback from customers", Lei said.

And Xiaome is branching out, with plans to start selling its smartphones in Hong Kong, Taiwan and Singapore by the end of this year.