Bootleg Unzipped (Part 1)

5/13/2012 11:36:54 AM

Exploring the second largest mobile phone industry

The phone to the left is not an iPhone 3G. In fact, it's not an Apple product at all. This is just one of the countless Apple smartphone knock-offs that are sold in the market today — a business (legal or otherwise) that has been thriving since smartphones began to dominate the cellular industry.

Description: Bootleg (part 1)

You've seen these bootleg devices; you find them in digital malls, at the Thursday night-markets in your neighbourhood, or in the hands of cousins and relatives who either didn't know better, or know it well enough to get it. You’ll find it everywhere in Malaysia, and while its presence isn't as massive as it was three, four years ago, the market exist. And it's not going away.

But it's not like you don't know this. Counterfeit and bootlegging is, after all, a long-practiced tradition, something that is as much a part of our lives as piracy or plagiarism. But bootleg smartphones have seen such a steep rise in popularity that the scope of its business has now evolved into something beyond an easy search for money. It is now an industry; and as it often goes, it is also a culture.

We'll be untying the shoelaces and unzipping the hems of this phenomenon -- these bootlegs and counterfeits and imitators - and taking a look at the second largest phone industry in the world. But to do that closer, we'll have to take a look at the capital of bootlegging itself: China.

Description: iPhone 3G

On the Chinese TV, tuned in to the Hainan Travel Channel, the music blared with the enthusiasm of a rocket launch, and an unabashed "Wham!" introduced us to gold Chinese characters and a voice with a tone designed specifically to tell you that "Boy, have we got a deal for you!". The words shatter and we greet the Operator: a lady in a black vest and white shirt, who will go on to tell you to pick up the phone right now and dial in to the number at the bottom of the screen.

"Why?" we ask.

"Because you don't want to miss this," she says. And she holds up a phone.

The phone is, by all means of design and aesthetics, the Apple iPhone 4S.

But as the advertisement goes on to describe the features of the phone, the creeping slither of realisation reaches your head. The phone has Wi-Fi capabilities, she said. The phone has GPS and email and several selections of games -- "All for free," said the lady. The camera zooms in to the phone and you see that the interface resembles much of the iOS, but something's not right. The screen swipes too slowly. The email app is definitely different. The number dial screen is undeniably flipped.

The lady tells us that the phone is selling hot right now, and the TV takes us to a crowded room with people talking excitedly about the phone. Customer testimonials were taken, though they seemed to be rather too well rehearsed. The room started to look more like a makeshift museum exhibit than a proper phone outlet. The voiceover tells you that, if you call in for the purchase now, they'll be throwing in a gold watch for free. All for the price of RMB299 (RM145).

The realisation settles. It's a bootleg phone. A knock-off that had just advertised itself for a full 5 minutes on satellite TV.

That is how it is in China. 5 minutes of air-time could be given a phone that could've clearly violated 10 copyright laws with just the exterior alone, and that's before you walk into a mall and find yourself surrounded by it. You walk on the streets and you start to wonder if every device is a counterfeit. One out of five might be, but we re just in Hainan island, a retreat in the south of the mainland.

In Shenzhen, the capital of bootleg phones, this number might be vastly different.

It was then when the other realisation hit. Bootleg phones here are not just a quick, black-market business. They've really gone on to become an industry.


The bootleg phone industry in China have risen so fast that it eventually adopted a universal term. "Shanzhai" refers to counterfeit and pirated goods from China, specifically electronics, but the term was only popularised when these bootleg phones started becoming more popular. "Shanzhai" rough translates to "Mountain Stronghold" or "Mountain Village", though the more romantic etymology to the term stems from a metaphor that refers "Shanzhai" to a Robin Hood-esque act of defying corrupted warlords. It's a fitting term, which gives the eventual Shanzhai owners a sense of camaraderie.

Description: "Shanzhai" refers to counterfeit and pirated goods from China

Before bootleg phones grew into popularity, imitation electronic goods like DVD and MP3 players were starting to take rise in the market. This would eventually carve the notion that people will buy imitation electronics, and it didn't necessarily have to be a blatant knock-off. These manufacturing entrepreneurs would start applying their imitative skills into other segments of industries, eventually settling down on making phones.

The Shanzhai boom would really begin with a company named Mediatek, a semiconductor design company from Taiwan. Mediatek had designed a circuit board that could, inexpensively, integrate the functions of multiple chips in one. The circuit board makes it immensely easy to build a phone, and this is all small start-ups needed to quickly and cheaply produce low-cost mobile phones.

In 2007, regulators dictated that small companies no longer needed a license to manufacture a cell phone. What might've just been a small number of low-cost phone makers would increase into insurmountable numbers, as everyone from a five-personnel company to large manufacturers can just purchase these Mediatek chips (loaded with software) and simply assemble it themselves.

Phones, and even smartphones, used to require weeks and a large production team to assemble. Today, you can even purchase individual phone parts from smartphone vendors and assemble them in your room. Hobbyist phone builders in China can build something within just five minutes, and you don't need to be an expert to do so.

It's exactly this sort of accessibility and freedom that allows Shanzhai phones to mould into its own industry. but its massive growth is also due to its demands. The cheap devices, which come full-featured and functional, is not only popular in China, but also among surrounding emerging countries. Asian countries, as well as developing countries in Africa and Latin America, found much love for these multifunctional and trendy phones. All the more reasons for manufacturers to keep pumping them out.

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