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Move over iPhone: In China, it's cool to call on 'Xiaomi'

STORY HIGHLIGHTS
  • Analyst: China is set to surpass the U.S. this year as the top smartphone market
  • Three of the top five selling smartphone brands are local Chinese makers
  • Lenovo, Coolpad and Huawei smartphones all outsell Apple's iPhone in China
  • Xiaomi brand smartphone has become a cult favorite among Chinese tech geeks

Editor's note: A self-described media junkie, China nerd and geek mom -- Kristie Lu Stout is also an anchor/correspondent for CNN International. Join her on News Stream, each weekday at 8pm Hong Kong time, 1pm London, 8am New York.

Hong Kong (CNN) -- He's the 20-something blogger who created the iconic Steve Jobs action figure.

He's also the Hong Kong-based gadget fan who worked his supplier contacts in China to leak authentic components of the latest iPad before the official launch.

And yet, despite his devotion to all things Apple, MIC Gadget's Chris Chang says if it came down to just one device -- he would choose a Chinese-branded smartphone over the iPhone.

"I like spending less money to get a similar performance from the iPhone 5 or Samsung Galaxy series," says Chang. "The China-branded smartphone is my choice."

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Chang shows me his preferred smartphone -- the roughly $400 OPPO Finder. The Android-powered phone is just 6.65 millimeters thin -- thinner than the iPhone 5. That said, it's not a 4G handset.

But it's enough for Chang and a growing number of discerning Chinese smartphone users.

China is forecast to overtake the U.S. in smartphone shipments and become the world's leading smartphone market this year, according to research group IDC.

Break it down by marketshare and, according to IHS iSuppli Research, in the first half of 2012, three of the top five smartphones sold in China are local Chinese brands: Lenovo, Coolpad and Huawei. All three individually outsell Apple's iPhone in China.

The mainland China smartphone market has been partly fueled by the demand for lower-cost handsets. In China, a 16GB iPhone 4S sells for RMB4,488 ($712). Traditionally, Huawei and Coolpad have been selling to the lower-end of the market, below RMB1000 ($160).

But China's Meizu, Xiaomi and OPPO are climbing up the value chain -- not so high as to angle for the top tier of the market with Apple and Samsung, but right in the middle.

"Meizu, OPPO and Xiaomi are poised to differentiate themselves as strong mid-range smartphones, like a sedan," says Josh Ong, China Editor of The Next Web. "At RMB 1,999 ($317), the (Xiaomi) Mi-Two will be 'good enough' for millions of consumers who aren't willing to spring for the more expensive devices."

Meizu was formerly the coveted smartphone brand in China, but that mantle has passed on to Xiaomi which -- like Apple -- masterfully markets its technology like a lifestyle.

Xiaomi is the smartphone cult hero in China with its intensely loyal fans who adore the company's charismatic founder, Lei Jun, and the brand's distinctive style.

How China's mobile market breaks down  How China's mobile market breaks down
How China's mobile market breaks downHow China's mobile market breaks down

Bottom line -- in China today, it's cool to have a Xiaomi phone.

"Watching a thousand Xiaomi fans give Lei and the new phone a standing ovation last month really drove home the company's success at connecting with its customers," says Ong.

So how can the rest of the world get their hands on a cult Chinese smartphone?

Well, you can't. They're only available in China. Xiaomi may have an English language Twitter feed, but it didn't want to lend its Mi-Two phone for review to international audiences on CNN's News Stream. (We had to borrow the phone from Chris Chang.)

Meizu has an English language Website, but there's no option provided to buy the phone. There is, however, a retail store outside the mainland... in the Chinese territory of Hong Kong.

The fan base for China's sleekest smartphones will remain in China for now.

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