On Wednesday, reports emerged that Spanish phone brand Zetta has been selling rebranded Xiaomi phones under its own name, marketing the devices as "iPhone killers".
According to The Next Web, this came to light when a user tore down the phone - and discovered a sticker under the battery of the phone. Peeling the sticker off, the user discovered Xiaomi's logo.
It turns out that Xiaomi - which has talked in the past about wanting to be cautious about its international growth - wasn't aware of what Zetta was doing. A statement from the company made it clear that it wasn't connected to Zetta, or anyone else in the region.
“We do not have any working relationship with Zetta. We have no partnerships in Western Europe currently," a Xiaomi spokesperson told Gadgets 360.
The question then is how Zetta - a company with only seven employees - was able to get enough inventory to successfully set up its own brand in Spain. Xiaomi was not able to share any further data, leaving the matter open to speculation.
It's an interesting question, because Zetta's growth in Spain was made possible through the same mix of build quality and low prices that has made Xiaomi popular in other markets, including India. However, as pointed out in this report, Zetta's pricing is significantly higher than that of Xiaomi, which makes sense if it's just buying products at retail prices and selling them at a markup, as seems to be the case.
Xiaomi did not confirm whether or not it will explore legal options against Zetta. There's clearly more going on here, but Zetta has completely denied the accusations.
In a statement, Zetta announced that the company shares "some electronics" with "some companies" from Asia, but adds that the smartphones from these companies are not usable with European networks, and that Zetta incorporates software which improves the phones.
Zetta further states that the real added value of the company comes from adapting the software of some components so that any Spanish or European citizen can use the phones with a full guarantee.