Apple also should be prepared for a drop in the rankings, Avanti says.

"Apple continues to lead in terms of innovation, with the iPhone 5s currently out ahead of Xiaomi with a 64-bit processor and fingerprint scanner, but even considering features like these, many users in both China and overseas markets may find it increasingly difficult to justify the big price differential between the two brands," the Taipei-based market research firm said in an Oct. 4 report.

Now small rice is being planted in Taiwan and Hong Kong through deals with telecom providers. Like a lot of Chinese companies, Xiaomi needs new markets to ensure long-term success via diversification. It's not a talked-about species of smartphone in Taipei, where I live, and I learned about it only when I saw an advertisement on a taxi. It's too early to forecast the eventual harvest, but Xiaomi may be ready to bloom.

At the time of publication the author had no position in any of the stocks mentioned.

Ralph Jennings is on LinkedIn.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

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