Xiaomi's CEO Disses the iPhone in Unveiling $500 Marquee Device

(Bloomberg) -- Xiaomi Corp. unveiled its latest top-tier smartphone to bring the fight to Apple and Samsung, as the Chinese startup readies a highly anticipated initial public offering.

Co-founder Lei Jun showed off the MIX 2S, which starts at 3,299 yuan ($527). The phone -- on paper -- sports many of the bells and whistles familiar to power users but is about half the iPhone X’s price tag. It’s got a six-inch bezel-less screen, ceramic body, Qualcomm’s latest processor and dual cameras. It’s Xiaomi’s third full-screen phone: a feature now embraced by the biggest vendors from Apple Inc. to Samsung Electronics Co.

The MIX 2S could spearhead Xiaomi’s increasingly aggressive expansion into overseas markets, particularly the developed countries in which it still lacks presence. The company that once led the Chinese market has taken back domestic share from local brands such as Huawei, Oppo and Vivo since last year, but all are looking abroad as China’s smartphone market begins to shrink.

Xiaomi’s latest gadget could boost sales as Chinese consumers trade up to better-quality products and phone makers raise prices to compensate for the absence of new buyers. At its Tuesday launch, Lei repeatedly took potshots at Apple’s most advanced gadget, demonstrating how the iPhone X got much hotter running games and how Xiaomi’s low-light camera took better snapshots. At one point, he even said the phone’s AI assistant surpassed Siri.

“We are comparing to iPhone X because people say it is the best phone. We just want to show we surpassed the best in many features,” Lei told an audience packed into a Shanghai auditorium often used as a concert venue.

Beijing-based Xiaomi is said to be planning to debut later this year, a coming-out party that could value the company as high as $100 billion. It’s been investing in a growing number of partners that sell products from air purifiers to power banks under Xiaomi’s brand. Huami Corp., which makes fitness trackers and smartwatches, raised $110 million in a New York IPO last month.

The company now hopes a growing footprint beyond China could help boost its debut valuation. It was the biggest smartphone vendor in India in the fourth quarter, according to research firm IDC. Apart from emerging markets, Xiaomi’s also eyeing Europe and North America, where it can sell higher-priced products. The company is said to be angling to challenge Apple on its home turf no later than 2019.

Xiaomi’s flagship line will be pivotal to that effort. The MIX 2S also sports wireless charging and near-field communication, two technologies gaining popularity among consumers.

To contact Bloomberg News staff for this story: Gao Yuan in Beijing at ygao199@bloomberg.net, Shelly Banjo in Hong Kong at sbanjo@bloomberg.net.

To contact the editors responsible for this story: Robert Fenner at rfenner@bloomberg.net, Edwin Chan

©2018 Bloomberg L.P.

With assistance from Gao Yuan, Shelly Banjo