Xiaomi: The Scrappy Chinese Smartphone Maker That's Poised To Wallop Samsung And Apple

This month, Chinese smartphone maker Xiaomi hit a milestone.

According to research firm Canalys, Xiaomi sold more smartphones in the first quarter of the year in China than Apple did. It's especially relevant considering Apple made its biggest push ever in China in January by finally selling the iPhone through China Mobile, the largest wireless carrier in the world with over 700 million subscribers.

It's the kind of growth that should have giants like Samsung, Apple, and Lenovo worried as the scrappy startup eats into their market shares in one of the most important battlegrounds for mobile computing.

Xiaomi is often called the "Apple of China," not just because its products look a lot like Apple's products, but because it elicits the same sort of fanboyism Apple does in Western countries. New Xiaomi devices often sell out within minutes online. The company's CEO, Lei Jun, is a Steve Jobs-like figure, right down to his uniform of black shirts and light blue jeans.

This week, Xiaomi announced its first tablet, the 7.9-inch Mi Pad. Yes, it looks nearly identical to the iPad Mini, but at $240, it's a good $150 cheaper than Apple's gadget. Plus, it offers the same high-resolution screen and comes in a bunch of different colors.

This is the latest trend in mobile. Some foreign manufacturers have figured out how to build quality smartphones and tablets and sell them at thin margins in order to scoop up market share in emerging markets where consumers are still making the transition from feature phones to smartphones.

And it's really working for Xiaomi. Here's a look from Business Insider Intelligence at Android phone usage in China. Xiaomi devices are among the most popular.

Xiaomi has plans for an aggressive international expansion this year. It'll start selling devices in Russia, India, Brazil, and a few other countries in the coming months. Those are all countries full of potential consumers who can't afford pricey phones from Apple and Samsung, yet still crave the allure of such premium devices.

These are moves that threaten the two top companies in mobile - Apple and Samsung. They've done well scooping up market share and gobbling more than 100% of the profits in mobile by catering to wealthy consumers. But that high end of the market has become saturated. The next battle will be to get devices into the pockets of the millions of consumers still making the jump to smartphones.