Xiaomi logo
People stand near a logo of Xiaomi ahead of the launching ceremony of Xiaomi Phone 4, in Beijing, July 22, 2014. REUTERS/Jason Lee

Xiaomi is rumored to be working on a small-sized smartphone that will come with flagship specs. It is expected to take on Apple's iPhone SE smartphone that features a 4-inch screen and Apple A9 chipset.

According to Giz China, a 4.3-inch Xiaomi smartphone has been spotted in China and early speculation suggests it is the Chinese company’s answer to the newly released iPhone SE. Recently, CNBC reported that iPhone SE preorders in China had crossed 3.4 million.

The rumored Xiaomi Mi 5 Mini is expected to carry flagship specs such as a Snapdragon 820 chipset. It is the same SoC (system on a chip) that powers the newly launched Xiaomi Mi 5 flagship smartphone. The SoC on the 4.3-inch Xiaomi phone will be supported by 3GB of RAM. Early rumors indicate that Xiaomi may underclock the Snapdragon 820 to perform at 1.84 GHz to regulate the heat it produces.

The screen is expected to support HD resolution of 720x1280 pixels. The Xiaomi Mi 2, launched in 2012, also featured a display of the same size and supported the same screen resolution.

The physical Home button is expected to feature a fingerprint scanner. For photography, it is likely to ship with a 13-megapixel camera but will not support OIS (optical image stabilization). At the time of writing this article, there is no information available on the front camera of the rumored phone.

The native storage on the device will be 32GB, and it may not have a microSD card slot. The capacity of the battery is not known yet. The smartphone is expected to be announced in June this year, with a price tag of 1,799 yuan ($275).

The iPhone SE, available on preorders, comes in two storage editions of 16GB and 64GB which are priced at $399 and $499, respectively.