Xiaomi fires warning shot at Apple, Samsung with Mi5

The company - the world's fourth-largest smartphone maker after Apple, Samsung and Huawei - used its first ever European launch event to show off the product, which sported a 5.15 inch screen, a 16 megapixel back camera, a four megapixel selfie camera, a fingerprint sensor and a curved back.

It would cost just CNY 2699 - about £297 - for the top-end 120 GB-capacity version, and CNY 1,999 for the 32 GB handset.

List prices for Apple's flagship iPhone 6S began at £539 on Wednesday, and Samsung's just-announced Galaxy S7 was on pre-order for £569.

The smartphone maker was now valued at around £32bn, and had seen huge growth thanks to its tactic of selling low-price, high-spec smartphones, primarily in mainland China.

But the company was now being forced to look beyond the People's Republic, as the market there became saturated.

"We primarily focus on existing markets. We're beginning to work our way into other markets," international vice-president Hugo Barra told CNBC.

During the launch event, Barra was constantly comparing the Mi5 to Apple and Samsung, which was something seen in previous Xiaomi launches as well.

Much of the company's success in China had come from its ability to sell the handsets at a lower price, and getting users to sign up for ongoing software and services, something analysts doubted Xiaomi could replicate overseas.

But Barra was adamant, saying: "We'll bring this to other markets…so lot of exciting evolution ahead which will allow us to bring our internet content outside of China."