CEO Of 'China's Apple' Is Insulted By Comparison To Apple -- Says They're More Like Google Or Amazon

China's penchant for copying western ideas reached a new level last year when the country basically cloned Apple and its founder Steve Jobs.

A company called Xiaomi and its founder, Lei Jun, were quickly dubbed "China's Apple" and "China's Steve Jobs," in part because of Lei Jun's habit of introducing the company's new smartphones while wearing a black turtlenecks and strolling the stage in front of spare, tasteful product photos.

Not surprisingly, Xiaomi is doing very well. The company's smartphones are now reportedly outselling Apple's iPhones--in part because they're much cheaper than iPhones. Like other Chinese smartphone makers, Xiaomi is taking advantage of Apple's decision to try to maintain its high prices in a country in which average incomes make the iPhone unaffordable.

These cheap smartphones from China could be a big problem for Apple, Samsung, and other "premium" smartphone vendors over the next few years. Even in rich countries, there's no reason to pay $600 for a phone when you can get an excellent one for $100.

This week, Xiaomi launched a new smartphone, the "Hongmi," or "Red Rice." It's red and beautiful. There were 7.45 million pre-orders, and the phone reportedly sold out in 90 seconds. So that, too, is very Apple-like.

But Lei Jun is not happy about the Apple comparisons.

When Reuters caught up with him in Beijing this week, he said Xiaomi is really more like Google or Amazon. See the transcript below.

(SOUNDBITE) (Mandarin) XIAOMI FOUNDER & CEO, LEI JUN, SAYING:

"We're actually an Internet company. We've already got a business in mobile phone hardware and we want to add to that an Internet platform. We can earn money from that, once it's established."

(SOUNDBITE) (English) REUTERS REPORTER, JANE LANHEE LEE, SAYING:

"So how can you call yourself an Internet company? You sell mobile phones."

(SOUNDBITE) (Mandarin) XIAOMI FOUNDER & CEO, LEI JUN, SAYING:

"Well, I'd like to turn the question around and ask, what is an Internet company? The Internet represents an advanced way of thinking. Companies that are armed with this have an incredible competitive edge. Today, we're already China's third largest e-commerce company and we've already built a massive, massive, mobile internet platform. And we have a lot of apps. We've built the MIUI firmware based on the Android OS and it's a very strong system. People just don't get it. The mobile phone itself is only the carrier. Microsoft used to sell Windows in a box with a CD in it. Does that make Microsoft a paper box company? The box and the CD are only the carrier. If people don't understand this, they can't understand what kind of company Xiaomi is."

(SOUNDBITE) (English) REUTERS REPORTER, JANE LANHEE LEE, SAYING:

"What is the situation today? How much money are you making or how profitable or how big is this ecosystem?"

(SOUNDBITE) (Mandarin) XIAOMI FOUNDER & CEO, LEI JUN, SAYING:

"We really just started from September last year. Our revenues have just exceeded US$3.2 million a month, but by the end of next year our revenue should reach US$21-24 million dollars per month. That's just from our Internet ecosystem - from our market, from our game center, and various other revenue streams online."

(SOUNDBITE) (English) REUTERS REPORTER, JANE LANHEE LEE, SAYING:

"How do you feel about people referring to Xiaomi as China's Apple? And are there any Apple strategies, elements of Apple strategies, that you admire or that you've adopted."

(SOUNDBITE) (Mandarin) XIAOMI FOUNDER & CEO, LEI JUN, SAYING:

"Xiaomi and Apple are two completely different things. If you understand Xiaomi, I am sure one day you will understand that Apple and Xiaomi are completely different companies. You know, I really don't like answering the question of whether Xiaomi is China's Apple. I that think the core problem is people don't understand Xiaomi. The main difference is that it is the internet that has made Xiaomi. Apple's design is very simple, and no matter who the customer is there is one set solution. There are few opportunities to meet individual preferences. But Xiaomi's system can be changed by anyone, and thousands of designers create all sorts of functions, looks and solutions."

(SOUNDBITE) (English) REUTERS REPORTER, JANE LANHEE LEE, SAYING:

"But a lot of foreign media, especially, compare you to Apple."

(SOUNDBITE) (Mandarin) XIAOMI FOUNDER & CEO, LEI JUN, SAYING:

"Apple is, of course, an incredibly successful company. I'm not trying to compare Xiaomi with Apple. But if people really want to compare Xiaomi to a foreign company, you can say it looks a bit like Apple but it's really more like Amazon with some elements of Google. So take these three companies together, then it's easier to clearly understand what kind of company Xiaomi is. Xiaomi selling mobile phones is like Amazon selling Kindles. So you can understand why we sell them for so cheap."