After Apple's iPhone 6, the Second Most Important Smartphone of 2014

Apple's iPhone 6 will likely prove to be the most significant phone of 2014. But coming in a close second, a Chinese handset made by a company that's taking the world by storm.

Aug 10, 2014 at 11:00AM

Apple (NASDAQ:AAPL) is likely to unveil the next iPhone on Sept. 9. The iPhone 6, which could come in two different varieties, is expected to feature a larger screen, and should smash existing sales records. According to The Wall Street Journal, Apple is prepared to move as many as 70 million-80 million of the new iPhones by the end of December.

Should that prove to be the case, Apple's iPhone 6 will clearly be the most significant handset released in 2014, parking a massive upgrade cycle, and perhaps poaching some of Samsung's (NASDAQOTH:SSNLF) best customers.

But there's another handset, one that could ultimately prove nearly as important, and in some ways, perhaps even more so. While the public looks forward to the iPhone 6's debut, Xiaomi's Mi 4 is already available for sale.

The Mi 4: big phone, small price tag

Apple's iPhone 6 is widely expected to ship with a 4.7-inch screen. If that's the case, it will be slightly smaller than Xiaomi's 5-inch Mi 4. The recently released flagship, which Xiaomi unveiled last month, features a large, full HD display, 3 GB of RAM, and a speedy, Snapdragon 801 processor.

In other words, it's about as powerful as Samsung's Galaxy S5, and its performance could be comparable to Apple's iPhone 6. But unlike Samsung and Apple's flagships, the Mi 4 is cheap, costing Chinese consumers around $325. Prices vary by carrier, but Chinese buyers generally have to pay two or three times as much for Samsung's Galaxy S5 or Apple's iPhone 5s.

Xiaomi's rapid rise, and emerging market ambitions

With high-end hardware and bargain prices, it's no surprise that Xiaomi has taken China by storm. Despite being founded just four years ago, the company has risen to the top of the Chinese handset market. According to research firm Canalys, Xiaomi sold more handsets in China than Apple or Samsung last quarter, making it the fifth largest smartphone vendor in the world.

For the time being, Xiaomi's influence outside of China is relatively limited: Its handsets are not officially available in Western markets. But Xiaomi has begun targeting other emerging markets, including India.

Xiaomi's expansion plans

Xiaomi's Mi 3, the predecessor to the Mi 4, went on sale in India last month. After just a few weeks, there's no hard data on Xiaomi's success in the Indian market, but anecdotal evidence paints a bright picture: Flipkart, the popular Indian e-commerce site, has struggled to keep the phone in stock (as of this writing, would-be buyers must register for a chance to purchase the phone).

As with Chinese consumers, Indian buyers may find Xiaomi's value enticing. The Mi 3 retails for around $230 in India -- for comparison, Apple's nearly three-year-old iPhone 4s costs about twice as much. In contrast, Samsung offers Indians a variety of low-cost Galaxy handsets, some of which are cheaper than Xiaomi's Mi 3. None, however, offer as much value -- Samsung's Galaxy Grand is priced competitively with the Mi 3, but features weaker hardware.

The Mi 4 has not yet made its way to India, but should be expected to do so in the coming months. Although it's more expensive, the Mi 4 offers beefier internals, a higher quality camera, and 4G network connectivity.

A worthy competitor to Apple and Samsung

Xiaomi faces fierce competition in India (not just Apple and Samsung), but with the value it's offering, it would not be surprising to see Xiaomi eventually emerge as a dominant player in Indian handset market.

Certainly, with its meteoric rise to the top of the Chinese market, Xiaomi has indisputably become a worthy competitor to Apple and Samsung. While all eyes focus on Apple and its next flagship, Xiaomi's new Mi 4 could prove to be nearly as important.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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