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By Gerry Shih BEIJING (Reuters) – Xiaomi Inc said it had upgraded its operating system to ensure users knew it was collecting data from their address books after a report by a computer security firm said the Chinese budget smartphone maker was taking personal data without permission. The privately held company said it had fixed a loophole in its cloud messaging system that had triggered the unauthorized data transfer and that the operating system upgrade had been rolled out on Sunday. Like Apple Incs iMessage service, Xiaomi lets users avoid SMS charges by routing messages over the Internet rather than through a carriers network. In a lengthy blogpost on Google Plus, Xiaomi Vice President Hugo Barra apologized for the unauthorized data collection and said the company only collects phone numbers in users address books to see if the users are online.