Lei Jun, CEO of Xiaomi, talked about the newly launched low-cost Xiaomi phone and the company’s strategy in general at 2013 China Internet Conference today. He expects Xiaomi’s annual revenues to reach 100 billion yuan ($16 bn) in 2015, no later than 2016.

Low-cost Smartphone

Red Mi (not official translation), released in last month, is at a price less than half of that for its flagship model. Mr. Lei and his team came up with the idea of making a 1000-yuan smartphone, about half of the price of its flagship model, in July last year as they found the products by their suppliers in mainland China and Taiwan were much improved.

Three years ago, Xiaomi started off trying to offer Chinese mid-price Android smartphones with the best possible configuration. Last year the 1000-yuan smartphone became a hot topic in China, for prices of electronic components was much lowered. Local manufacturers such as Huawei and ZTE have launched a lot of low-cost Android smartphones since then.

Software Ecosystem

Xiaomi started building software ecosystem from last September, according to Lei. Now every service for providing content, from digital music, books and videos, to mobile browser is in place.

MIUI has more than 20 million users and has been monetizing services there. It’s obvious now that Xiaomi’s strategy is to sell as many devices as possible and have even more users to adopt its Android ROM MIUI where all kinds of apps and content are for them to consume.

MiTalk

MiTalk, the mobile messaging app by Xiaomi, was launched earlier than WeChat. Lei believes MiTalk is the No. 2 in terms of users in the market although the there’s a big gap from the market leader. He declined to disclose the exact number of MiTalk users but said that was bigger than the media speculated. He seems satisfied with the fact that MiTalk survived as the No. 1 competitor is so strong.

Xiaomi knew Tencent would tap into the mobile voice messaging market. Lei said they thought the success rate would be 50% if Tencent acted half a year later, or 100% if Tencent didn’t move after a year. But only after two to three months Tencent launched WeChat.

Other Gadgets

It is rumored that Xiaomi will launch Smart TV and tablet soon. When asked about it, Lei said that Xiaomi had been experimenting with a variety of products, but it doesn’t mean Xiaomi would launch all of them.