BEIJING, Feb. 24 -- Chinese smartphone maker Xiaomi released its new smartphone Mi5 Wednesday, after a year of attempting to maintain its dominance in the world's largest smartphone market with budget devices.

The Mi5, which is powered by a Qualcomm Snapdragon 820 processor, remains true to the brand's pricing strategy, with the basic version available for 1,999 yuan (around 306 U.S. dollars), just a fraction of the price of an iPhone 6s.

It also released an updated version of the Mi4, which has hit the shelves priced at 1,699 yuan.

The Mi5 comes more than a year after the release of Mi Note, and almost a year and half since the previous version. The Beijing-based smartphone maker continued to release budget smartphones under the RedMi lines to retain its market share in China.

Xiaomi undershot its 2015 smartphone sales target of 80 million units but CEO Lei Jun said during the product launch Wednesday that the company remained the number one phone brand of choice in China last year.

However, the gap between Xiaomi and its closest domestic rival Huawei is closing, with the difference in market share kept within 1.5 percentage points.

Huawei saw smartphone sales worldwide surge 52 percent last year, exceeding the 100 million unit threshold, data compiled by Gartner shows.

While producing smartphones, Xiaomi also produces tablets, routers, televisions and set-top boxes, as well as air and water purifiers, scooters and wristband as part of its smart-home line.