"Thanks to its smartphone and IoT business, Xiaomi has strong know-how on integrating software with hardware, building revenue models on top of this. It has a strong brand name with a large user base, which also gives it an advantage," Mishra said.

Xiaomi said more than 374 million IoT devices, excluding the company's smartphones and personal computers, have been connected to its AIoT platform by the end of June. More important, over 7.4 million users have five or more IoT devices connected to Xiaomi's platform, and its smart home app now has 56.5 million monthly active users.

In the second quarter of this year, Xiaomi also overtook Apple to become the top-shipping wearable band vendor, according to market research company Canalys.

Xiaomi's domestic rivals Huawei Technologies Co, Oppo, Vivo and Realme are also moving in the same direction.

Chen Mingyong, CEO of Oppo, said the company has been working hard to enrich its IoT product portfolio with smart televisions, smartwatches, earbuds and other products.

"Oppo will continue forging ahead and strive to become the explorer and leader in the era of integration of all things … We will win the battle of transforming from a pure mobile phone company into an ecological technology company," Chen said.

Oppo has shared its vision of building an IoT ecosystem covering the key categories of smart devices and four specific scenarios－personal, family, travel and office.

Vivo announced its IoT strategy in 2018 with the launch of its first connected platform, Jovi IoT, aiming to take on the smart home market by enabling users to control their devices with its voice assistant.

Realme, a fast-growing Chinese smartphone vendor, unveiled its first laptop in August after it had sold more than 100 million smartphones worldwide. The launch was part of the company's latest push to build a robust IoT ecosystem.

Xu Qi, vice-president of Realme, said: "The company has accumulated a sizable fan base in the past three years, which has provided us with a turning point from making a quantitative change to a qualitative change. We are now accelerating work on building an artificial intelligence-enabled IoT ecosystem, with notebooks being an important part of that."

Xiang Ligang, director-general of the Information Consumption Alliance, a telecom industry association, said consumer IoT is the next battlefield for smartphone giants.