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Xiaomi made much of its $40 billion-plus fortune by selling affordable midrange and budget smartphones, like the Redmi Note 3. Now, Hugo Barra, the company's vice president of international, says the brand is going premium.

"When you look at...the prices of our products, they have been going up," he said in Hong Kong at Xiaomi's Mi Home centre, according to the South China Morning Post. "Our customers are demanding premium products from us, so we are delivering higher quality with more premium components."

Xiaomi's first smartphone, the Mi, was originally sold from 1,999 yuan (around $300, AU$400 and £230). Its latest in the line, the Mi 5, also starts at 1,999 yuan, but the company also brought out a Pro edition at 2,699 yuan, or US$400.

Barra's statements indicate that prices, and hopefully phone quality, will rise more noticeably from now.

Xiaomi didn't respond to a request for comment.

The company would be following in the footsteps of Huawei, its Chinese arch nemesis. Huawei also made its name in the industry with cheap to midrange phones, but in the past year has focused more on premium devices, like the P9 (£450, AU$900. No US pricing yet, but AU pricing converts to around $670) and the Google Nexus 6P (launched from $499, £449 and AU$899).

Often battling with Apple and Huawei for the top smartphone spot in China, Xiaomi has been a fixture in the global top five for the past couple of years. However, it was knocked out of the group earlier this year by Vivo and Oppo, two Chinese competitors, according to IDC Research.