​Move over, Apple and Samsung: Here comes Xiaomi

Most Americans have probably never heard of Xiaomi, but given the Chinese smartphone maker's meteoric rise, that may soon change.

Xiaomi, which means "Little Rice" in Chinese, is grabbing marketshare from more established rivals such as Apple (AAPL) and Samsung, thanks to its iPhone-like designs and lower prices. The company has jumped into the top five smartphone companies for the first time, according to data issued by research firm IDC on Wednesday.

For now, Xiaomi's business is concentrated in China, where it's the leading smartphone company. But it is also looking abroad, working to expand into new markets such as Indonesia and Mexico.

Xiaomi's sleek designs have prompted complaints from Apple that the Chinese company is ripping off its designs. While iPhone-like design elements might be luring Chinese consumers to Xiaomi, it's also the company's near at-cost pricing that's boosting the upstart.

"We just fundamentally believe that when it costs you $200 to make something, you shouldn't sell it for $600....The business model is to make a little bit of money where we can," Xiaomi vice president Hugo Barra, a former Google (GOOG) executive, said at a conference earlier this month, according to CNET. "Innovation is not a luxury item. Innovation is for everyone."

xiaomi.png
Xiaomi's Mi 3 smartphone has helped power the company's explosive growth in China.
Aloysius Low/CNET

Xiaomi shipped 17.3 million units in the third quarter, making it the third-largest smartphone maker for the period after leader Samsung and runner-up Apple, according to IDC. Its growth has been explosive, with year-over-year shipments more than tripling, the research firm found.

At the same time, Samsung suffered from a decline in shipments during the third quarter, with shipment volumes slipping 8.2 percent to 78.1 million devices. Apple, which just released the iPhone 6 and 6 Plus models, saw shipments rise 16.1 percent.

"Key to [Xiaomi's] success was the launch of its Mi4 smartphone in August, which was positioned as a high-end alternative to the status quo. What remains to be seen is how quickly the company can move beyond its home territories to drive volumes higher," IDC said in a statement.

The Mi4 phone received an "outstanding" rating from CNET earlier this year, although the review noted that one downside was the $400 phone is limited to China, at least at that time.

The findings come amid marketshare struggles for Samsung, which on Thursday said its profits for its most recent quarter fell to their lowest in more than three years. The firm is facing challenges from Apple's new iPhone models, as well as less expensive products from Xiaomi.