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Oct 22, 2016 11:41 AM EDT

Xiaomi Denies Ties With Company ‘Caught’ Selling Rebranded Mi Phones [VIDEO]

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A Spanish company is said to be selling Xiaomi rebranded phones and calls them "Zetta."

Zetta is marketed as a high-end smartphone brand and is advertised to be Spain's response to the iPhone. The company making Zetta was found to be selling repackaged Xiaomi handsets and passing them off as original Zetta phones at higher prices.

According to El País, Zetta's deception was brought into focus after the founders' interview with El Español went viral. Spanish websites, Forocoches and Thegeekhammer, exposed that the phones are actually made by Xiaomi. The claim that Zetta founders were buying the phones cheap, altering its look and reselling them at a much higher price was denied by the company.

Zetta started operations in April 2014 and was founded by Spaniard Unai Nieto and Chinese Eric Cui from their base of operations in Extramadura, Spain. They rolled out their first handset in early 2015 with a 5.5-inch display, 1GB of RAM and an 8MP camera for under €200. The phone bears the image of an acorn with a bite taken out of it, said to be an homage to their regions oak trees.

According to TheNextWeb, Forocoches tore down one of Zetta's phone, only to discover that it was indeed a Xiaomi device. They found a sticker beneath the battery that when peeled off, revealed another sticker with Xiaomi's logo replete with a serial code.

Thegeekhammer delved deeper by investigating the phone's operating system. They managed to access its ROM and found it was running CyanogenMod. The open-source custom ROM is only free for personal use and companies who wants to use the OS need to pay license fees to Cyanogen OS.

A statement was issued by Zetta in Spanish on its website. To summarize, they said their phones are designed and made with Chinese production chains, and that the company shares electronics in the Asian sector aimed to adapt their phones for use in the European market.

They also said that the components are not compatible with European networks so Zetta incorporated software to improve use. They claim to be a small company with only 7 workers who humbly work to offer Asian technology for use in Spain and Europe.

Xiaomi responded to El País by issuing a statement, saying Xiaomi knew nothing of the existence of Zetta, and that they have no commercial ties with the makers of "the iPhone from Extremadura."

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