CEO Lei Jun introduces Xiaomi products at an event held in Beijing on Tuesday. Photo: IC

Xiaomi Inc has finally dumped polycarbonate, a material commonly used in cheap plastic phone bodies, for all-metal in its newly released low-cost Redmi Note 3, which analysts see as a bid to take on its scrappy rivals.

The Redmi Note 3 came on Tuesday, just a month after Xiaomi's major rivals, Meizu and Letv, launched similar smartphones Meilan Metal and Le 1s, respectively, in late October.

"Meizu and Letv are pressuring Xiaomi and challenging its leading role in developing well-spec'ed and low-priced phones," Wang Yanhui, head of Shanghai-based research firm Mobile China Alliances, told the Global Times Wednesday.

Amid the fierce competition, Xiaomi CEO Lei Jun took a sentimental tone when promoting Redmi Note 3 at a new product launch event held in Beijing on Tuesday.

Wang said it was a good marketing move that stole some of the limelight away from its rivals.

As well as introducing the new 5.5-inch "phablet" as thoroughly as he did at previous events, the CEO, to attendants' surprise, also made a heartfelt speech about the difficult process involved in developing the new gadget and his business funding history. The pitch was accompanied by warm piano music, marking the most sentimental launching event of Xiaomi in its history.  

"Our goal is not to become the market No.1, but to make high-quality products that can touch young people's hearts," said Lei, adding that the Redmi Note 3 is exactly the phone that "you [young people] are looking for."

The sentimental promotion will strengthen the loyalty of the company's fans, but will hardly help boost the sales of Redmi Note 3, which failed to showcase any distinctive edges, Wang noted.

The above-mentioned three phones all adopt all-metal design, fingerprint technology and same-size display with the same resolution, as well as a price tag of up to 1,099 yuan ($172). Analysts said this not only highlights the heated competition among Internet companies, but also shows the major challenges facing traditional mid-end smartphone manufacturers.

The line between premium phones and low-cost ones is being further blurred, especially by Xiaomi, which lowered the price of the Redmi Note 3 to 899 yuan for its 16GB model.

In comparison, other gadgets developed by phone veterans like Huawei and HTC cost more than 2,000 yuan.

While launching all-metal phones with good specifications is nothing special, as big-name smartphone makers have already done the same to woo consumers, it is seen as a threat to traditional phone makers when Chinese Internet companies like Xiaomi tag their phones with aggressive prices, said Wang Jun, an industry analyst with Beijing-based market consultancy Analysys International.

"Chinese Internet companies usually sell phones at low prices, squeezing the overall industry profit margin," he told the Global Times Wednesday. "Traditional phone makers have long been suffering from the business model adopted by Chinese Internet companies, which do not completely rely on sales of smartphones to make big profits, but expect to sell online services and content such as online video and e-commerce to loyal users brought by the must-have device."

However, Wang from Shanghai warned that such a business model "may not work," therefore companies like Xiaomi had better continue diversifying their product range and further their overseas expansion.