Lei Jun, founder and CEO of China's mobile company Xiaomi, shows new features at launch ceremony of Xiaomi Phone 4 in Beijing
Lei Jun, founder and CEO of China's mobile company Xiaomi, shows the new features at a launch ceremony of Xiaomi Phone 4, in Beijing, July 22, 2014. China's Xiaomi unveiled on Tuesday its new flagship Mi 4 smartphone, aimed squarely at the premium handset market dominated by Apple Inc and Samsung Electronics Co Ltd. REUTERS

As Apple and Samsung continue to battle it out on top of the smartphone arena, Xiaomi, a Chinese smart phone manufacturer, founded about 4 years ago, is narrowing the distance. Concentrating first in its home court, China, they have been successful in taking over the number one spot, pushing down Samsung into second place.

Much of Xiaomi's success is attributed to its pricing strategy. They offer low-cost prices for smartphones with high-end specs. Their smartphones are priced at around $100, but they offer the same features as that of a more expensive brand. They found the perfect place to start in their own homeland, China, with a population of 700 million people and counting. Now, Xiaomi boasts a staggering 14% market share in China, a big leap compared to their 5% market share one year ago according to BBC. India, another country with a huge population, is strongly being pursued by another Chinese phone maker, Micromax. Its strategy is the same as Xiaomi's but with the added customization of its smartphones for users in India. One highly popular, customized feature is having two sim slots for one smartphone.

Competition is fierce. Apple, Lenovo, Huawei and Xiaomi are all able to tap into the global market, each having their own piece of the pie. Although, Samsung gained so much momentum in the past years and was actually relentless, it is showing signs of slowing down. It does not help them that their local currency is getting stronger too. It has appreciated by 10% against the US dollar according to The Guardian. A strong Korean Won makes production costs higher in Korea.

Now Samsung is a bit more cautious with its projections for the long-term. Analysts are signaling mixed reviews. Some gave off lower expectations while some remained positive. The optimists pointed out Samsung's established name and foundation in numerous countries. Also, at this point, everyone is still uncertain about the level of success Xiaomi will have outside of China.