The battle between Qihoo 360 Technology Co Ltd and Xiaomi Corp in the household hardware market escalated on May 1 as Qihoo CEO unveiled a new Wi-Fi router similar to one introduced by Xiaomi less than two weeks ago.

"We are making the best-performance router products in the industry," said Zhou Hongyi, Qihoo's chairman and CEO.

"Our competitors should not claim their products have the fastest connection speed after today. In addition, we have better security functions."

Zhou's remarks were targeting Xiaomi, which was launching the first online sales of its routers the same day.

Xiaomi, better known for its smartphones, plans to sell 5,000 routers on popular micro-blogging platform Sina Weibo.

The device has similar hardware configurations to the Qihoo counterpart except for a 1-terabyte storage space.

Xiaomi's product was selling for 699 yuan ($112) while Qihoo set its product's price at 99 yuan.

Qihoo hopes the price advantage grabs some market share from Xiaomi.

The stiff competition between Qihoo and Xiaomi, both based in Beijing, started about two years ago as both companies were seeking profits in China's rapidly growing smartphone market.

The fight extended to the rather cold markets such as routers and cellphone accessories later last year after Qihoo lost the war in the smartphone sector.

Xiaomi has had a higher share than Apple Inc in the nation's smartphone market as of last year, according to research firm Analysys International.

The company is most likely launching the next-generation flagship smartphone on May 15.

Qihoo on the other hand pledged to release more "small but highly functional" devices in this year in a bid to slow down Xiaomi.

Qihoo said more than 10 million mini-portal Wi-Fi routers have been sold since last year.

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