Photo/Hua Ang

Jan. 4 (NBD) -- Chinese hardware giant Xiaomi Inc. will spin off its budget-phone label Redmi as a separate sub-brand on January 10 in Beijing, the phone maker announced Thursday.

Redmi is known for its low prices. The first Redmi model was launched in the middle of 2013, sold for 799 yuan (116.5 U.S. dollars), and Redmi phones are generally priced below 1,000 yuan (145.8 U.S. dollars).

After the spin-off, Redmi will continue to focus on cost-effective products and the e-commerce market, while Xiaomi's Mi brand will concentrate on the medium- and high-end market and new retail, Xiaomi founder and CEO Lei Jun commented on the Twitter-like social platform Weibo on Thursday.

To separate Redmi series off from Mi and allow them to move towards different directions is aimed to better shape sub-brands of Xiaomi, Lei Jun commented.

With the split, Xiaomi now operates four sub-brands, with Mi phones targeting the premium market, the Redmi ones eyeing online consumers, Poco-branded phones aiming for overseas markets, and selfie-featured Meitu phones specifically designed for female customers.

Chen Hang, electronics industry analyst with Southwest Securities, told NBD that Xiaomi increasingly focuses on specific segements, aiming to uplift its brand power as well as seek development opportunities amid competition with top players in the field.

Rumor has it that Redmi will be operated not only as an independent brand, but also as a separate entity. In response, a source at Xiaomi said to NBD that Redmi will be a separate brand as per the company's statement, but the source didn't directly deny the possibility of Redmi's becoming an independent company.

Lu Weibing, who served as former president of smartphone manufacturer Gionee Group and recently joined Xiaomi, is expected to lead Redmi.

Lei welcomed Lu's joining Xiaomi on Weibo just one day before the spin-off announcement.

When contacted by NBD via Wechat, Lu replied, "it's subject to official statements."

It's noted that phone makers are racing for optimizing product structure and Xiaomi is not the first company which went on the road to have multiple smartphone brands under its portfolio.

Huawei kicked off the trend of sub-brands with Honor back in 2013, and other players jumped on the trend as well, Oppo-Realme and Lenovo-Motorola, for instance.

In the views of industry insiders, both Honor and Redmi are low-range phone brands and competitions of Mi versus Huawei and Redmi versus Honor will come under spotlight in the global smartphone industry this year.

Email: gaohan@nbd.com.cn