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5 foreign companies that are beating Silicon Valley at its own game

Does it sometimes feel like American-born tech companies are bent on world domination? Facebook buys WhatsApp, the most popular mobile messaging app in the world; Google talks about drones delivering Wi-Fi to places that barely have electricity; and Amazon contemplating testing drones (and perhaps moving certain operations) overseas.

With the Internet boom, however, the world outside Silicon Valley is innovating at the same breakneck pace. From heavy-hitters such as Samsung and HTC to a little video game developer from Vietnam who took the app world by force with Flappy Bird, tech talent across the globe is going to make it pretty tough for US-based companies. Here’s a look at five companies that best US tech giants at their own game.

1. China: Xiaomi vs. Apple

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    Xiaomi CEO Lei Jun takes a selfie at the announcement of the Mi Note, the company's new flagship phone. The Mi Note is half the cost of a comparable iPhone 6 Plus or Galaxy Note 4.
    Ng Han Guan/AP
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What is Xiaomi? When Chinese mobile company Xiaomi came out with the Mi1 smart phone in 2011, many pointed out the lowercase “i” was a not-so-subtle nod to the iPhone. Four years later, Xiaomi has been dubbed “the Apple of China” for its wildly popular phones (and multiple striking similarities to the American phone brand’s signature aesthetic).

Xiaomi has released four more versions of the Mi phone since (respectively called Mi2, Mi3, Mi4) and recently released the Mi Note, a phablet-sized phone. Each new generation has bore striking resemblance and specs to the parallel succession of iPhones. It also released the Mi Pad last spring, a mini tablet available in an array of candy colors, with a 2,048 x 1,536 resolution and an operating system featuring flat graphics and a central “home” button. Sound familiar? Spec-wise it is identical to the retina-screen iPad Mini. Look-wise, the only clear difference is the tablet is slightly heavier than its iPad Mini counterpart. And the similarity isn’t just in the phones – Xiaomi's chairman and chief executive Lei Jun is known for wearing jeans and dark-colored shirts during major product announcements, much like a certain Apple co-founder.

Why will it beat Apple? Xiaomi’s business model is to make premium phones at dirt-cheap prices, emphasizing quantity and a longer shelf-life over profit margin. Though a risky strategy, it immediately paid off: the Mi1 sold out in under three hours when it was first released. Since then, the company has become the largest smart phone seller in China and third in the world, making more than 60 million sales last year. 

Its signature line of premium smart phones (the Mi brand) sells for about $300 off contract (though the latest version is priced at more than $500 and is still selling well) while its second-tier line of phones (the Redmi brand) sells for about $150 per phone. Comparatively, the iPhone sells off contract for about $1,000 in China.

Some say that the competition is more between Xiaomi and other Asian tech brands aiming for China’s growing middle class, while Apple may go after luxury consumers. But when customers can get an iPhone clone for a third of the price, it may be tough to convince them that American-made is the way to go. 

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