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Xiaomi to launch Mi store in US -- but no phones for now

The Chinese smartphone maker will begin selling its products in the US market in a few months, but only its lesser-known gadgets like headphones and its Mi Band wearable.

Xiaomi is launching an online store in the US in a few months, but won't be bringing its flagship Mi line of smartphones.Photo by Aloysius Low/CNET

SAN FRANCISCO -- Chinese smartphone maker Xiaomi is bringing its products to the US, but perhaps not the ones consumers might clamor for most.

The company announced Thursday at a fireside chat with press here that it will be launching its online Mi store in US, but it will not carry any phones in the Mi line, Mi Note or Redmi line of smartphones, nor its Mi Pad tablet. Instead, Xiaomi will sell its lesser-known ancillary products such as headphones and its Mi Band wearable fitness tracker.

An online store signifies the first step towards its eagerly anticipated entry into the US market. While not a household name, Xiaomi has steadily built up its reputation among the tech savvy as "the Apple of China" with affordable and slick-designed devices packed with high-end components, all with price tags that are sometimes half that of its competitors' products. Further adding to the hype is its position as the world's most valuable startup with a valuation of more than $45 billion. But the Western markets represent a different beast -- one where consumers gravitate to the biggest names like Apple and Samsung.

Hugo Barra, a former Google executive who left the search company to join Xiaomi as vice president of international operations in 2013, said the company wants to be calculated and careful when bringing its flagship products to new markets. It's a now-recurring theme for the start-up that considers itself an Internet services company -- not just a handset maker.

"The amount of effort required to bring those products [phones and tablets] to market is significant. We just have to move at the right pace," Barra told the audience. "So we're accelerating our entry in a sense by bringing simpler products." Barra cited factors like manufacturing, packaging, regulations and the software hurdles with a language gap for the slow arrival of Xiaomi phones in Western markets.

Xiaomi is growing at an incredible pace, having amassed more than 100 million users of its MIUI operating system, a variant of Google's Android OS, in just four and a half years since its August 2010 founding.

Xiaomi is now the leading seller of smartphones in China and accounted for five out of every eight Android phone activations in the last month, the company said, thanks to large followings in developing markets like India, Malaysia and Indonesia.

It's the world's sixth largest smartphone manufacturer, according to research firm TrendForce, although its upward trajectory suggest it'll likely move up the ranks throughout the year. The pace of that growth has many wondering when Xiaomi will expand to markets where Apple and Samsung have captured large percentages of the market. Xiaomi prefers to take its time.

Xiaomi's strategy of launching an online store echoes similar plays run by fellow Chinese manufacturers such as Huawei and Alcatel. While these companies supply cheaper smartphones to prepaid customers through their carrier relationships, they are attempting to push their higher end flagship smartphones directly to consumers through their own online presence.

Xiaomi, however, is moving even more gingerly, holding off on its marquee smartphone products for now.

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