China's Xiaomi unveiled on Tuesday its new flagship Mi 4 smartphone, aimed squarely at the premium handset market dominated by Apple Inc and Samsung Electronics Co Ltd.

The Mi 4 has a 5 inch, 1080p screen and a Qualcomm Inc Snapdragon 801 2.5 Ghz processor, said Chief Executive Lei Jun at a launch event in Beijing.

But sheathed in iPhone-like metal sides, the Mi 4's similarities to Apple's smartphone drew murmurs from the crowd of 'iPhone' when showcased by Lei.

Founded in 2010 by Lei, Xiaomi seeks to cut costs by eschewing brick-and-mortar stores in favor of web-based distribution and word-of-mouth marketing.

Xiaomi became the world's sixth-largest smartphone vendor in the first quarter of 2014, according to data firm Canalys, after repeatedly doubling its sales. The company was valued at $10 billion last year.

Xiaomi sold 18.7 mln smartphones in 2013 and on Tuesday maintained a 60 million sales target for 2014. For comparison, Huawei Technologies Co Ltd has said it is targeting 80 million smartphone sales for the year.

The latest phone was unveiled at a glitzy launch event at the National Convention Center in Beijing, where Lei Jun and Vice President Hugo Barra - a former Google executive - posed for photos with a winding queue of fans decked in Xiaomi-branded red T-shirts.

Barra told Reuters in an interview this month that the company was actively targeting the Indian market.

- Reuters