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.
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.
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.
"Shanzhai"
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.
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.
