Phone sales are important for Xiaomi, but not because they're a source of profit. According to global vice president Hugo Barra, the company doesn't make even a "dime" from smartphone sales. It is reliant on revenue from software and other devices (e.g. smart home products) for profit.

Barra also noted during his interview with Reuters that the company has invested in India and other Asian markets. It's getting ready to offer direct sales to US consumers.