Xiaomi takes first big step outside Asia with Brazil smartphone

Chinese smartphone maker Xiaomi has started making devices in Brazil for sale locally, promising to dramatically undercut rivals on price in the first big step beyond Asia for the world's most valuable technology start-up.

Xiaomi's global vice-president, Hugo Barra, said in an interview on Tuesday that Brazil was "stage one of our Latin America launch," pointing to Mexico and Colombia as logical next steps in the region, although he declined to say when.

Without traditional advertising or stores, China's top-selling smartphone company is betting that a tempting price tag will capture the attention of Brazilians who have become increasingly cost sensitive as their economy sours.

"We offer high-quality products at incredibly aggressive prices, so we're starting with larger developing markets where people are very price-sensitive," Barra said.

At a launch event earlier in the day, he announced that the entry-level Redmi 2 smartphone would go on sale in Brazil next week for 499 reais (US$160).

The phones are already rolling off an assembly line outside of Sao Paulo run by Foxconn Technology Group, the same contract manufacturer making Apple's iPhone in the country since 2011.