Days before Apple unveiled the much anticipated iPhone 5C & 5S, Xiaomi’s CEO, Lei Jun, released the Mi-3. Both the iPhone 5C/S and Mi-3 are renowned for their sleek designs and consumer usability, making Xiaomi appear to be China’s version of its American counterpart, Apple.

However, contrary to popular belief, Xiaomi and Apple have very different business models. First and foremost, there is a large difference in the prices of the iPhone 5C ($860) and Mi-3 ($330) and ultimately, the target customer. Even though the 5C is supposedly more affordable, it pales in comparison to the Mi-3 which takes affordability and accessibility seriously. It will appeal to the majority of mid-high income customers. Separately, the customer outreach of both companies are dissimilar. Apple has developed a somewhat distant relationship with their customers; building the products based on what the company views as required. Xiaomi has established close relationships with their consumers by requesting for feedback and conducting votes and ultimately basing the product on what consumers want.

Xiaomi (5%) deserves credit for beating Apple (4.8%) in terms of market share; it is unfairly labelled as Apple’s Chinese copy-cat. At the end of the day, perhaps there are some lessons that Goliath should learn from David.

Source: http://www.economist.com/news/business/21586344-xiaomi-often-described-chinas-answer-apple-actually-quite-different-taking-bite-out