Unlike what some people tend to expect from Chinese companies, this phone is not a copy or a crappy product with even crappier software. We're looking at a dual core 1.5Ghz chip (Qualcomm MSM8260 SoC), Adreno 220 graphics processor, 1GB of RAM, and 4GB of ROM. It has all the usual stuff - WiFi, Bluetooth, AGPS, and so on. It has a 4" 480×854 LCD built by Sharp, and it even has GLONASS, the Russian GPS alternative. It also has two antennas for better reception, and a massive 1930mAh battery (as opposed to the more common 1400mAh or 1500mAh ones), which promises to deliver two days of "real use" (whatever that means).
Software-wise, Xiaomi has already built somewhat of a name for itself - it's the company behind the MIUI Android ROM, which, unsurprisingly, is also what runs on this phone. The mentioned dual-partition setup means you can have two different MIUI builds installed, and you can even have one build being updated in the background while using the other build. Pretty nifty. Engadget has a video demonstrating MIUI on the Xiaomi Phone.
The most astonishing thing about this phone is its price: $310 (available in October). In fact, there's going to be a 1.2Ghz version as well, and that's going to be even cheaper. This is an absolutely mind-blowing price point, especially since we're not dealing with some silly knock-off, but a truly innovative phone with a unique and well-thought out Android build.
Back when Android first started rearing its cute little head, many people assumed the market would be flooded with cheap Android smartphones - this hasn't really happened so far. The most popular Android smartphones are high-end devices, in the same price range - or higher, even - as Apple's iPhone. The iPhone is losing market share not to cheap, crappy devices - but to similarly priced, high-quality Android phones.
The Xiaomi Phone, however, is cheap - but unlike what was predicted, it doesn't appear to be crappy at all. It looks like a fantastic device, great hardware, good software, and some innovative features not found on any other smartphone. I obviously can't predict what kind of an impact this device will have, or if people in the west are willing to buy a Chinese device like this (maybe OEM'd by carriers), but I would call this phone one of the most significant smartphones released this year.
Engadget is currently reviewing the device, so we'll have to wait and see what people who have actually used it come up with. On paper, though, this is one impressive engineering feat - and a clear warning shot across the bow of other smartphone makers. Not too long ago, everyone looked upon Hyundais and Kias with disdain - today though, everybody recognises these brands deliver so much quality and features, that it's hard to justify spending more on European marks.
Maybe the smartphone is reaching that point, too.