Beijing-based Xiaomi Technology believes its recently–launched Android smartphone will provide serious competition to the iPhone in China, and revealed it is now looking to develop and sell software for the device, reports Bloomberg. 

The so-called Xiaomi Phone was launched in China last month costing just CNY1,999 (US$315), half the official price of the iPhone but claiming to offer better performance. 

Speaking at the TechCrunch conference in Beijing today, company founder Lei Jun said that the Xiaomi handset is powered by a dual-core, 1.5GHz processor, giving it superior hardware at lower cost. iPhone 4 has a single-core, 1GHz processor, but the 16GB version retails at CNY4,548 in China.

Lei said he is aiming for Xiaomi to become “world class” and gain a place on the Fortune 500 list. Lei set up the company in April 2010 via US$41 million in funding from employees and external investors, including Morningside and IDG.  He had previously founded online retailer Joyo.com, which was acquired by Amazon in 2004.

"Apple’s iPhone redefined the smartphone and in the past five years, the rest of the mobile-phone industry can’t keep up with the pace,” Lei said. “I started Xiaomi for the same reason."

According to earlier reports, the firm received 300,000 pre-orders for the Xiaomi Phone in just 34 hours following its announcement.