Ambitious Chinese device maker Xiaomi is reported to have run into problems with the launch of a new mass-market smartphone, which could have proved pivotal in driving volumes for the company.

According to Marbridge Daily, the “Hong Mi” (“Red Rice”) smartphone has had its network access permit – necessary for sale in China – cancelled by the country’s Ministry of Industry and Information Technology.

It was reported that the device will now not be released “in the near future”.

While the full specification of Hong Mi has not been confirmed, it is believed to have a 4.7-inch screen and bright red plastic casing – although black and white versions were also suggested.

Other mooted features include a 1.2GHz dual core processor and dual-SIM support.

A price of around CNY1,000 ($163) was suggested.

Xioami, which is focused on the Chinese market, has been gaining traction in the country, with a survey late last year putting it behind only Apple and Samsung in the brand consideration charts.

According to a Bloomberg report last week, Xiaomi is looking to sell 15 million handsets this year, doubling the 7.2 million achieved in 2012.

With Hong Mi being a mass-market device, it could have proved central to it meeting this aim.

With its previous devices being mid-tier, in order to grow Xiaomi will need to target either the high-end or the entry level – in both cases where competition is already fierce.

Reports have also suggested the vendor has another hi-spec device in the works (likely to be called Mi3), powered by a 2.1GHz Qualcomm processor, and with a feature called “Mi Hi-Fi” – although it is not clear what this may be.

Availability of this device would be from mid-August.

The Financial Times also said this week that Xiaomi has moved into Taiwan and Hong Kong in order to move from its base in China, with reports of sell-outs in the former.

In addition, the company only accepted PayPal payments at launch, a method which is apparently not common in Taiwan, leading it to acknowledge that the purchase experience was “not good”.