Anyone who knows anything about the Chinese mobile phone market would not be surprised about something like the Xiaomi phone being labeled "innovative." As much as Chinese companies have a reputation for making cheap knockoffs and cloning anything from baby food to Apple stores, there's a significant and competitive domestic Chinese market for cell phones which does reward innovation. Not necessarily YC-caliber innovation, but cell phones became prevalent and dominant in China faster than in the West, because of the large domestic market, low regulations, and international manufacturers eager to jumpstart the market. For example, Motorola was for a while the largest foreign business in China and was the market leader in mobile devices. Cheap operating costs and a rising affluent middle class = lots of cell phones sold.

You want an anecdote? I remember when I was in China in 2003. (Or 2004. Around that time.) Back here in the US, Motorola RAZRs were sorta popular. Here's an image for comparison of scale:

http://farm3.static.flickr.com/2331/2498240940_80a83f70e9.jp...

In China, the popular phones were very different. They were much smaller, they had more varied ringtones, they were more colorful. And they were not all Motorola phones either, Chinese domestic manufacturers were all trying to make their phones as thin, sleek, and minimalist as possible. (Sound familiar?) Since then Motorola has lost a lot of market share to Chinese manufacturers who mostly are not delivering tasteless clones. Part of it is that expensive cell phones become a status symbol, and the people who can afford those phones take them seriously. I couldn't find any pictures by Googling combinations of "china," "cell phone," "2003," etc. So take my word on it or not, but that was the case. (Of course, the Xiaomi device looks like an iPhone. But then everything looks like an Apple product these days.)

What's the moral of the story? Don't be like Motorola, don't throw away your Chinese market share, and don't force Google to acquire you just for your overpriced IP.