China's rising smartphone titans Xiaomi will try to steal the limelight in the mobile application processor (APU) chip business by developing its own APUs for use in budget smartphones. The Chinese company's first in-house 'Rifle' mobile APUs will be officially presented in a press event in May. The chips
will be manufactured using a standard core license technology from ARM.

Lately, the smartphone industry landscape has been refocusing on budget handsets that pack improved hardware and software. This could increase the demand for affordable over the coming years.

The release of Xiaomi APUs could pose a threat to Qualcomm and Samsung Electronics, as they are counting on the growing APU market in China, the world's single biggest smartphone market.

Until now, Xiaomi has been using chips that powered its smartphones and tablets provided by Qualcomm, Samsung and Taiwan's MediaTek.

Samsung Electronics, the world's biggest smartphone firm in market share in the first quarter of this year, has been fabricating its Exynos-branded APUs, followed by Apple with its A-series. The world's no.3 phone producer Huawei Technologies operates its Kirin-branded APUs and the world's no.6 LG Electronics also plans to unveil its own APUs.

Qualcomm sells more smartphone chips than any other manufacturer, although the company's majority of its profits are coming from patent royalties paid by handset makers that use its chips.