Xiaomi operates on a vertically-integrated model that enables the company to sell hardware at cost or below in order to attract users and earn money by selling content.  Xiaomi also keeps its prices low or close to its manufacturing costs by keeping most of its products in the market for eighteen months rather than the six-month norm followed by many smartphone companies.  Xiaomi said they sell their phones close to cost and intends to make profit on services. Lei Jun, Xiaomi's CEO, said that the company prices the phone almost at bill-of-material prices, without compromising the component quality and performance compared to other premium smartphones.  The company also sells phone-related peripheral devices, smart home products, apps, online videos and themes.  According to Xiaomi's Hugo Barra, the company sees itself as an internet and software company instead of a hardware company.  However, 94% of the company's revenue came from mobile phone sales in 2014, suggesting that the company is still dependent on hardware sales.