The iPhone 5C and China

So it seems well understood that Apple is going after the low to midrange markets with the 5C, specifically China. My question to everyone here is will an iPhone wrapped in plastic and sold in different colors make that much of a difference?

The iPhone will have to compete with the Xiamoi Phone, the most popular phone in China which basically is already doing what the iPhone is rumored to do with the 5C. Other than just having a cheaper iPhone available, what would be the big pusher here? Based on what I see with the Xiamoi phone...it is actually a very well polished handset offering features even not found on the usual Android or iOS phone .

Xiaomi-miphone-android-phones_medium

Iphone-5c-martin-hajek_medium

Don't get me wrong the 5C will probably sell well, but I am just curious if there is a risk that people everywhere else who would have bought a $200 iPhone 5S on contract decide to go with the cheaper 5C because it is cheaper does basically the same thing and comes in different colors.

Do you think this could be a situation where Apple sales a record amount of phones, but ends up making less in profits?

Your thoughts?