Better-than-expected sales of its cheaper Hongmi smartphones helped propel newcomer Xiaomi, Inc. to the rank of China's third-largest smartphone vendor in the first quarter of 2014.

Beijing-based Xiaomi took a 10 percent share of China's smartphone market in the quarter. South Korea's Samsung Electronics was again the top smartphone vendor, this time grabbing an 18 percent market share. Lenovo placed second while Apple improved to fourth place from fifth with a nine percent market share.

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Analysts said a surge in demand for its lower-priced phones, especially the Hongmi, sparked Xiaomi's record growth in Q1. They said Xiaomi, which is only four years old, has progressed so fast that many in the mobile phone industry in China are in disbelief at its rapid progress.

Xiaomi, which released its first smartphone only in August 21011, shipped 11 million Hongmi smartphones in the first quarter compared to seven million in the previous quarter. The company expects its Hongmi smartphones to account from between 50 percent to 70 percent of its total smartphone shipments this year.

Hongmi smartphones are priced as low as 699 yuan (US$113) compared to an Apple iPhone that retails for some 4,990 yuan (US$800).

Xiaomi remains committed to marketing most of its smartphones in China's huge and hungry market. It does, however, have plans to compete in 10 foreign markets in Southeast Asia, Russia, Brazil and Mexico. Xiaomi intends to eventually sell software and other virtual goods over its smartphones to generate more revenues.

Currently, smartphone vendors are transitioning to a new generation of smartphones configured for China's new and faster 4G networks.

Samsung lost market share in the fourth quarter of 2013 to Xiaomi and Lenovo, which are selling less expensive smartphones. Analysts believe Samsung will have to move faster in China and release more lower-end devices.

Xiaomi is a privately owned Chinese electronics company that is one of China's biggest electronics firms. It designs, develops, and sells smartphones, mobile apps and consumer electronics.