Chinese smartphone maker has X-factor

What next for Xiaomi, the Chinese smartphone giant that came from nowhere?

The story so far is remarkable. The company was founded in Beijing in 2010 by entrepreneur Lei Jun, and launched its first handset the following year.

Fast-forward to 2014, and Xiaomi has become the world's third-largest smartphone maker after Samsung and Apple. A round of fund-raising in December resulted in a $45 billion valuation being placed on it, making it the world's most valuable tech startup.

Xiaomi specializes in making high-quality devices using some of the best components on the market and selling them at rock-bottom prices with wafer-thin margins. Its phones run on a heavily modified version of Android known as MIUI.

I was intrigued by all this, and decided to buy one of the handsets. This isn't as straightforward as it might seem, as Xiaomi has no bricks-and-mortar stores, doesn't work with conventional distributors and instead sells its products directly to customers online. This approach helps to keep the prices low.

I wasn't too happy about buying online sight unseen. However, the phones do turn up in stores in Beijing, and I was able to buy a white 16GB Mi 3, a model that was announced in September 2013, for 1,900 yuan ($300).

A good comparison would be the 16GB iPhone 5S, launched in China in September 2013 and now available from Apple's online store for a far heftier 4,488 yuan.

So on the face of it the Mi 3 seems great value. I was pleased with my purchase as I left the store. It felt good in the hand - sufficiently weighty to suggest quality without being too heavy - the technical specifications were impressive, and I liked the bright 12.7 cm screen.

However, my initial experience of using the phone was not good. The shop changed the language setting to English, but a lot of the apps were in Chinese, a language I struggle with after just a few months in China. It was loaded with an old version of the operating system, 4, rather than the latest, 6, and I couldn't figure out how to update it, and odd flashing numbers kept appearing at the edge of the screen.

I was beginning to feel I'd made a mistake and should have saved up for an iPhone.

Then I discovered there was a Xiaomi service center in Sanlitun, so I took the phone along and asked them to update the OS to version 6. This took five minutes, and ever since the phone has worked brilliantly.

Xiaomi has been widely dismissed in the West as an Apple copycat. Critics said the phones were iPhone look-alikes and the MIUI resembled Apple's iOS. Some went as far as accusing Lei of copying Steve Jobs by wearing dark clothing at product launches.

Now, however, there are signs that the company is being taken seriously overseas. An article in the UK newspaper The Guardian said Xiaomi is uniquely placed to benefit from the predicted next digital revolution, the "Internet of Things", where a vast range of devices will be interconnected.

The US tech review site CNET gave the latest handset, the Mi Note launched in January, an "excellent" rating, saying it "showcases Xiaomi's top-class potential to the world".

Another site, Mashable, said, "There may be no hotter company on the planet than Xiaomi."

The general perception of the business seems to have shifted from imitator to innovator. Now if only you could just walk into a local Xiaomi shop and buy one of its phones ...

Contact the writer at colin@chinadaily.com.cn