China’s biggest smartphone maker, Xiaomi, just landed over $1 billion in new venture capital financing, valuing the company at a reported $45 billion. At that valuation – higher than that of Uber’s $41 billion — the Chinese tech giant just became the most valuable venture-backed company on the planet. According to recent IDC statistics, the company is already the third-largest smartphone vendor in the world, trailing only Samsung and Apple in terms of quarterly smartphone shipments. But can Xiaomi ever catch up to Apple and Samsung in terms of innovation and not just size?

For now, skeptics like Apple’s Jony Ive may scoff that Xiaomi is just a copycat imitator. The company’s flagship smartphone – the Mi4 – looks remarkably like an iPhone 5s. The company’s new MiPad tablet has much the same look as an iPad mini, and the company’s set-top TV box, the Mi Box, looks a lot like an Apple TV set-top TV box. The company’s founder dresses like Steve Jobs and the company’s presentations once included that “one more thing…” slide made famous by Apple. By these indicators, Xiaomi is just a cheap Chinese knockoff and hardly an innovation leader.

However, just consider how far, how fast, Xiaomi has come since it was founded in 2010. The company only released its first smartphone in 2011. Its first tablet was only released in May 2014. And, last spring, the company re-branded itself as “Mi” in order to appeal to a wider global audience ahead of a big international push. (Because, admit it, “Xiaomi” wasn’t exactly the easiest name to pronounce if you were a native English speaker).

As a result of this rapid growth, the company is now projected to sell over 100 million smartphones in 2015. More importantly, the company’s valuation has ballooned, rising from $4 billion in June 2012 to $10 billion in August 2013 to $45 billion this December. According to billionaire investor Yuri Milner (who has an extensive stake in Xiaomi), the company could easily more than double in value once again, to $100 billion. That’s a big milestone. By way of comparison, Chinese IPO superstar Alibaba now has a valuation of over $260 billion and Facebook has a valuation of just over $225 billion.

So that’s where we are today. Xiaomi may not currently rank as one of the world’s most innovative companies, but it does get props for its slick marketing campaigns, rapid growth, and online sales prowess. It’s been touted as an up-and-coming Chinese tech company that might follow in the footsteps of Alibaba. And, indeed, people are already starting to speculate about a Xiaomi IPO, perhaps as early as 2015. Xiaomi is also actively working to address one of its innovation weaknesses — a relatively thin patent portfolio — by working to double the number of patent applications it files every year.

However, even with twice the number of patents, Xiaomi won’t be able to challenge Apple unless it’s first-to-market with a radically new genre of product. In others words, for Xiaomi to challenge Apple as an innovation leader, the company needs to come up with more than just cheap, high quality smartphones boasting a lot of great specs – it needs to come up with something groundbreaking like the iPad (not just a me-too product like the MiPad). And that’s just what the company hopes to launch in 2015. According to a statement by founder and CEO Lei Jun, a new “flagship product” is coming in January 2015.

That makes sense because the continual launch of new genre-defining products is the strategy that’s helped Samsung challenge Apple as an innovation leader. Not only does Samsung have a smartphone line (the Galaxy) that can go head-to-head with the iPhone, the company also has an expanding collection of wearable technology in the form of the Samsung Gear line. The company was actually first-to-market with the Samsung Gear smartwatch. And now, you have Samsung making brave new forays into uncharted areas like virtual reality with the launch of the Samsung Gear VR.

Once Xiaomi is first-to-market with a truly innovative product, the company would have enormous momentum coming from the Chinese market, in the form of access to more than 1 billion potential users, including many young, affluent consumers. The company would also have a better relationship than Western tech giants with Chinese regulators, who might not like Google’s Gmail, but may not have a problem with Xiaomi’s mobile offerings. The company might also be able to leverage its relationship with China’s leading mobile content providers, including Weibo. (In fact, Xiaomi founder Lei Jun announced the new $1.1 billion round of funding on Weibo, not on Twitter)

At some point, Xiaomi needs to be known for more than just its cheap, copycat smartphones, especially as it ramps up its push into fast-growing markets such as India – a place where its weak patent presence has already proven to be a real obstacle. If Xiaomi ever figures out how to convince the rest of the world that “made in China” is the trademark of an innovation leader and not the telltale sign of an innovation follower, Apple and Samsung might actually have reason to be concerned long before Xiaomi ever brings its smartphones to the U.S. market.