The Economic Times is reporting that Xiaomi’s India Head, Manu Jain, informed PTI about the brand’s plans to set up its own shop in the country. He disclosed that they’re still in process of choosing partners for warehousing and logistics and still have to decide upon payment methods like COD.

It could take them anywhere between three to nine months to open device sales on the official website. The Xiaomi Mi 4 flagship smartphone was recently launched in India and it’s scheduled to go on sale on February 10 via Flipkart for Rs 19999 with 16GB of internal storage.

Here’s a recap of what the Xiaomi Mi 4 offers in specs:

– Android 4.4.4 KitKat w/ MIUI 6
– 5-inch 1080p FHD LCD
– 2.5GHz quad core Snapdragon 801 SOC
– 3GB RAM, 16GB storage (64GB arriving soon)
– 8MP front camera, 13MP rear snapper
– 3080mAh battery

Xiaomi has time and again said that India is one of its most important markets and apart from opening its own online store in the country, the company is also in process of starting an R&D unit in Bangalore.

Xiaomi India and Flipkart on Saturday announced 'a special festive surprise' for consumers who failed to buy the Xiaomi Mi 3 smartphones despite repeated attempts. The company is offering a chance to purchase Mi 3 to 25,000 consumers who unsuccessfully tried to purchase the device at least five times or more in previous flash sales.

According to Xiaomi, these 25,000 consumers will find the device added to their cart on Flipkart.com on October 6, without having to register or hit the 'buy' button, as was the practice followed during flash sales. 

Consumers will be intimated directly on October 5, if they have been selected, and upon selection they will have about one to two hours on October 6 to purchase the Xiaomi Mi 3. If some of the consumers do not buy the Mi 3 in the given time, then the device will be offered to a second batch of selected customers on the same day.

The company added via Twitter that this will be the 'last chance' to buy the Xiaomi Mi 3 in India.

Xiaomi Vice President, Hugo Barra had talked about this new system of sales called the Xiaomi Priority Pass at an event in Bangalore last month.

Since the first flash sale of the Mi 3, Xiaomi had faced a lot of criticism from potential customers, with people frustrated about the fact that they had to faced difficulties such as orders being cancelled immediately after being booked, or simply finding that the phone went out of stock in the time it took for the buy button to show up on their screens.

Along with the offer on Saturday, Xiaomi India has also announced that it has sold out more than 3,00,000 Mi phones - Xiaomi Mi 3 and Xiaomi Redmi 1S - since its launch in India two months back. The company did not give a breakup of the sales at this time, but it's known that the company sold around 1,00,000 Mi 3 units, so the split is roughly 1:2 between the Mi 3 and the Redmi 1S .

Manu Jain, GM and Head of India Operations at Xiaomi said, "We would like to pay tribute to our most passionate fans through this little gift of recognising their passion for our products. Even though they have repeatedly tried to get the device and failed, their determination to get Mi 3 clearly sets them apart as fans that any brand would be lucky to have. We do recognise this and have taken this initiative to provide them direct access to purchase the Mi 3. We wish all our fans a happy Dussehra, Eid, and Diwali, and thank them for their love and support."

Xiaomi is known for setting a low price on its smartphones and selling them in batches of several thousand in weekly sales. In nearly all of these sales, 10,000 to 60,000 phones were sold out in a few seconds. This has frustrated several people who have failed to buy a Xiaomi smartphone even after several attempts.

Sensing the high demand and low supply, quite a few people have started adding these phones to their cart on Flipkart and trying to sell them at a profit on classifieds websites. As soon as Xiaomi's weekly sales close a little after 2 pm every Tuesday, a lot of people have also tried to sell these phones via the comments here at NDTV Gadgets (comments that we promptly delete). What is Xiaomi doing to tackle this problem? NDTV Gadgets spoke to Xiaomi's India head Manu Jain at a conference in Bangalore to find out.

Jain is very vocal about his displeasure at people trying to resell Xiaomi smartphones.

"I personally hate this [reselling at profit]," says Jain, adding that Xiaomi is aware of the problem and is actively trying to curb it.

"We are working closely with Flipkart to block people who are gaming the system. Flipkart has an algorithm that blocks people from buying phones if they add repeatedly add [Xiaomi] phones to their carts but don't buy them," Jain says. This is just one of the various flags that the algorithm works on.

Jain says that he himself has bought Xiaomi smartphones for his family members via Flipkart.

"I keep buying phones from Xiaomi and even rival brands, just to see what the competition is doing. After I bought 7 or 8 phones, my account was blocked from buying phones on Flipkart," Jain says, adding that the algorithm probably flagged his account as similar to those of resellers.

Jain says Xiaomi is aware of certain people using scripts and browser extensions to automatically add phones to their carts.

"Flipkart is trying to block those scripts because it's not fair to buyers. I recently saw some people complaining online that they couldn't buy [Xiaomi] phones in spite of using these scripts. That means Flipkart's block is working," he says. When asked whether Xiaomi has considered approaching browser makers such as Google to block extensions, Jain laughs, "That's a good suggestion. Thank you." He adds, "We hadn't thought of that, but we'll consider it."

That's just one of the steps Flipkart has taken. It took just 5.2 seconds for Xiaomi to sell 60,000 Redmi 1S smartphones in its most recent sale on Flipkart. This is the time taken for people to add it to their carts on Flipkart. After this, buyers have to complete the checkout process within four hours, Jain says.

"Earlier, we gave people almost one-and-a-half days to complete checkout which used to give [some people] a lot of time to sell these phones on other websites. This time it was just 4 hours. We had to extend this by some time because of certain technical issues, but we're trying to shorten the checkout time as well," he says.

He says Flipkart and to a lesser extent, Xiaomi, have also been checking websites where people were trying to resell Xiaomi smartphones. "We're trying to track these people and get their accounts blocked," Jain says.

All of these are short-term solutions to solve the problem. One long-term solution that Xiaomi announced recently is the introduction of a priority pass. The company announced that those who have tried to buy its phones repeatedly and failed will be offered a priority pass, which will automatically add a phone to their carts. They will have to complete the checkout process within a stipulated period of time.

Jain says Xiaomi will put a significantly higher number of smartphones for sale every week. Although he didn't mention an exact number, reports suggest that Xiaomi could be offering as many as 1,00,000 smartphones for sale every week.

When popular Chinese handset maker Xiaomi Inc admitted that its devices were sending users' personal information back to a server in China, it prompted howls of protest and an investigation by Taiwan's government.

The affair has also drawn attention to just how little we know about what happens between our smartphone and the outside world. In short: it might be in your pocket, but you don't call the shots.

As long as a device is switched on, it could be communicating with at least three different masters: the company that built it, the telephone company it connects to, and the developers of any third party applications you installed on the device - or were pre-installed before you bought it.

All these companies could have programmed the device to send data 'back home' to them over a wireless or cellular network - with or without the user's knowledge or consent. In Xiaomi's case, as soon as a user booted up their device it started sending personal data 'back home'.

This, Xiaomi said, was to allow users to send SMS messages without having to pay operator charges by routing the messages through Xiaomi's servers. To do that, the company said, it needed to know the contents of users' address books.

"What Xiaomi did originally was clearly wrong: they were collecting your address book and sending it to themselves without you ever agreeing to it," said Mikko Hypponen, whose computer security company F-Secure helped uncover the problem. "What's more, it was sent unencrypted."

Xiaomi has said it since fixed the problem by seeking users' permission first, and only sending data over encrypted connections, he noted.

Industry issue

Xiaomi is by no means alone in grabbing data from your phone as soon as you switch it on.

A cellular operator may collect data from you, ostensibly to improve how you set up your phone for the first time, says Bryce Boland, Asia Pacific chief technology officer at FireEye, an internet security firm. Handset makers, he said, may also be collecting information, from your location to how long it takes you to set up the phone.

"It's not that it's specific to any handset maker or telco," said Boland. "It's more of an industry problem, where organisations are taking steps to collect data they can use for a variety of purposes, which may be legitimate but potentially also have some privacy concerns."

Many carriers, for example, include in their terms of service the right to collect personal data about the device, computer and online activities - including what web sites users visit. One case study by Hewlett-Packard and Qosmos, a French internet security company, was able to track individual devices to, for example, identify how many Facebook messages a user sent. The goal: using all this data to pitch users highly personalized advertising.

But some users fear it's not just the carriers collecting such detailed data.

Three years ago, users were alarmed to hear that U.S. carriers pre-installed an app from a company called Carrier IQ that appeared to transmit personal data to the carrier.

Users filed a class-action lawsuit, not against the carriers but against handset makers including HTC Corp, Samsung Electronics and LG Electronics which, they say, used the software to go beyond collecting diagnostic data the carriers needed.

The suit alleges the handset firms used the Carrier IQ software to intercept private information for themselves, including recording users' email and text messages without their permission - data the users claim may also have been shared with third parties. The companies are contesting the case.

And then there are the apps that users install. Each requires your permission to be able to access data or functions on your device - the microphone, say, if you want that device to record audio, or locational data if you want it to provide suggestions about nearby restaurants.

Shedding some light

But it isn't always easy for a user to figure out just what information or functions are being accessed, what data is then being sent back to the developers' servers - and what happens to that data once it gets there. Bitdefender, a Romania-based antivirus manufacturer, found last year that one in three of Android smartphone apps upload personal information to "third party companies, without specifically letting you know."

Not only is this hidden from the user, it's often unrelated to the app's purpose.

Take for example, an Android app that turns your device into a torch by turning on all its lights - from the camera flash to the keyboard backlight. When users complained about it also sending location-based data, the U.S. Federal Trade Commission forced the app's Idaho-based developer to make clear the free app was also collecting data so it could target users with location-specific ads. Even so, the app has been installed more than 50 million times and has overwhelmingly positive user reviews.

While most concerns are about phones running Android, Apple Inc's devices aren't free from privacy concerns.

Carriers control the code on the SIM, for example, and this is one possible way to access data on the phone. And, despite stricter controls over apps in Apple's app store, FireEye's Boland says his company continues to find malicious apps for the iOS platform, and apps that send sensitive data without the user knowing. "The iPhone platform is more secure than the Android platform, but it's certainly not perfect," he said.

Apple says its iOS protects users' data by ensuring apps are digitally signed and verified by Apple's own security system.

Back in the seat

The problem, then, often isn't about whether handset makers, app developers and phone companies are grabbing data from your phone, but what kind of data, when, and for what.

"If we look at the content sent by many apps it's mindboggling how much is actually sent," said Boland. "It's impossible for someone to really know whether something is good or bad unless they know the context."

Handset makers need to be clear with users about what they're doing and why, said Carl Pei, director at OnePlus, a Shenzhen, China-based upstart rival to Xiaomi. OnePlus collects "anonymous statistical information" such as where a phone is activated, the model and the version of software that runs on it, Pei said, which helps them make better decisions about servicing customers and where to focus production.

Unlike Xiaomi, Pei said, OnePlus' servers are based in the United States, which in the light of recent privacy concerns, he said, "gives people greater peace of mind than having them based out of China."

That peace of mind may be elusive as long as there's money to be made, says David Rogers, who teaches mobile systems security at the University of Oxford and chairs the Device Security Group at the GSMA, a global mobile industry trade association.

"Users are often sacrificed to very poor security design and a lack of consideration for privacy," he said. "At the same time, taking user data is part of a profit model for many corporations so they don't make it easy for users to prevent what is essentially data theft."