Monday, August 08, 2011

Must Read Monday: Bye Bye Shanzhai, Hello Mainstream Smartphones

Photo: Close Encounters
To Migrate or not. A wildebeest's dilemma:
"Starvation if I stay,
or risk of being eaten by a crocodile if I go
Shen Jingting wrote an excellent article for China Daily about the epic migration taking place within the Shenzhen mobile phone industry.

Shen is distinguishing three phases: 
  • Production of Shanzhai phones and focus on emerging markets, such as India and Nigeria and delivering to the domestic market.
  • Transform into a legitimate supplier with good relationships with operators in emerging markets, also because when a Shanzhai producer is acquiring a high profile it will be vulnerable for IP lawsuits (as happened to "G'Five International Ltd, a Shenzhen-based handset supplier that mainly sells phones in Asian and African countries, and was sued by Nokia in India for alleged infringement of intellectual property rights."). Or working for international brands such as Motorola or Samsung. 
  • Follow the Taiwan-based HTC Corp. strategy, that has succeeded in entering profitable markets in Europe and North America. 
There is enough ambition to reach the third phase. Huawei even expects to be a top five global mobile phone supplier by 2014. And ZTE wants to become one of the world's top three mobile phone vendors by 2015.

Read Shen's article here.

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