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Xiaomi threatens Samsung and Apple as third largest smartphone vendor

Xiaomi may have accrued its fair share of controversy over malignant marketing strategies and security practices, but the four year old company has still managed to muscle a position as the world's third largest smartphone vendor.

Just three years after coming to market, according to IDC Xiaomi has sold over 17 million smartphones and holds a market share of 5.3 per cent - hot on the heels of Samsung and Apple.

However, the real reason this is so impressive is largely because the Chinese company is not yet a global player. Xiaomi currently only sells its smartphones in a few developing countries, yet it has outpaced high-flying handset makers like LG, Lenovo and HTC who have been running the race for longer.

It seems Xiaomi's winning formula has been its willingness to sell top-end smartphones with cutting edge specifications at extremely affordable prices. Indeed, its handsets' price tags often sit only a little above the total costs of the components.

The company also shave expenditure by not having any physical retail stores and employees to sell their smartphones. Instead, Xiaomi relies on online retailers and social media for advertising and selling its devices.

Still, concerns have been raised over Xiaomi's willingness to create artificial demand with limited product runs, with the Chinese company also facing an investigation over its handling of private user data.

Elsewhere, the report revealed that Samsung's market share dropped by 8.2 per cent this year, a move that Strategy Analytics' executive director Neil Mawston told Reuters was due to the crush of competition on all sides.

Samsung continues to face tough competition from Apple at the higher-end of the smartphone market, from Xiaomi and Huawei in the middle-tiers, and from Lenovo and others at the entry-level." he said.