No way the price can be that affordable for those specifications; the OEMs would either be getting screwed or Xiaomi is making close to nothing on each machine.
I would find the latter plausible if they weren't already set to dominate the market upon release. This would simply be a move to assert brand dominance and squeeze everyone else out of the market.
Xiaomi doesn't have to factor in IP rights and R&D, that keeps costs down. I doubt, however, that "stealing" from Apple is a viable business model in the long term.
You seem to have been downvoted because people forgot how every Samsung phone was an iPhone rip-off on one way or another. Also their first tablets and even the use of Apple icons at their shops decorations.
It may not be anymore and that's the point of the comments thread: Great way to bootstrap your business. Once up and running with profits you can go your own way.
I would find the latter plausible if they weren't already set to dominate the market upon release. This would simply be a move to assert brand dominance and squeeze everyone else out of the market.