"Basically we're giving [handsets] to you without making any money," said Hugo Barra, Xiaomi's global vice president, in an interview with Reuters. "We could sell 10 billion smartphones and we wouldn't make a single dime in profits."
Xiaomi's phone business isn't just about selling hardware, Barra told Reuters, it's about recurring revenue from services over many years. The company also expects profit growth to be driven by sales of smart home devices and its software ecoystem.
Xiaomi didn't immediately respond to a request for comment.
Xiaomi has already made investments in India and Asia, and is now laying the groundwork for direct sales to US consumers, said Barra.
Xiaomi plans to unveil an all-new product at CES 2017, its first trip to the electronics trade show. But details are slim, and the product might not be a phone. Xiaomi is known for selling electronics of all kinds -- including phones, fitness bands, electric bikes, robot vacuums and even a rice cooker -- at lower prices than its rivals.