An industry of fakes
To give an idea of just how large the
Shanzhai phone industry is, picture this: Gartner's data states that 1.15
billion cell phones were sold worldwide in 2007. And according to data provided
by Chinese officials, 150 million Shanzhai cell phones were being sold in the
same year. Put in perspective, Shanzhai cell phones make up more than one-tenth
of the global sales, and we're just talking about the phones sold in China
alone. An article by Financial Times in 2010 estimated Shanzhai phones to
account for roughly 20% of the global 2G mobile market - this, against a market
consisting of Nokia and Motorola.
The numbers here doesn't come as shocking
if you would know how large the workforce behind Shanzhai is. Various
documentaries and studies have gone in-depth and into these Shanzhai production
lines to discover that it's much more than just a small venture. One particular
documentary discovered, to their surprise, that what was initially perceived as
a small production group in a small establishment was, in fact, a factory-sized
manufacturing line. Staff members there even dressed in accordance to their
work scope, aside from donning the appropriate anti-static scrubs for work.
Living quarters are provided along with food, housing several workers per room.
We've only been talking about the bootleg
industry from the cell phone/ smartphone perspective. Due to its similarity in
hardware, software and functionality, the Shanzhai phone industry is incredibly
competitive. Dividing profits between the manufacturing and retail sales,
companies and individuals may earn a meagre RMB8 {RM4) from each phone sale.
Shanzhai companies have thus undertaken different ventures into different
technological segment, which include netbooks and tablets. These imitation
trade even extended its portfolio to automobiles: actual counterfeit cars that
look like popular models and could drive.
But how could these companies and manufacturers
continue to churn out these copyright-infringing phones without a reaction from
the arm of the law?
The fact is that companies like Nokia and
Motorola have long urged the Chinese government to crack down on this industry,
but like piracy, the efforts made were merely minor dents on an industry that
thrives among the masses. It's an undeniably difficult battle: the government
may conduct raids in the city of Shenzhen to nip the Shanzhai production at the
bud, but these manufacturers themselves are large employers commanding high
amounts of workers. Clamping down these factories may upset the Shanzhai
industry, but it'll also mean the loss of jobs to hundreds and thousands of
workers.
The legality issue is also called to
question. Manufacturers and makers are capable of skirting through the gaps of
copyright law, ensuring that knock-offs by looks, the actual features and
functionality differ from the imitated brands enough to avoid copyright
infringements. But, logically, even if you think the combined force of the
world's top brands and developers could rain down a flood of copyright
courtroom cases, the sheer number of Shanzhai makers (from the lower-rung
groups to full-blown manufacturers) would mean more loss in legal fees that
actual gain.
The bad and the good of it
The problems related to Shanzhai phones are
the same across any cheaply-produced, laxly-manufactured products out there:
the lack of proper testing and safety measures. With companies caring only to
string as much products out there as possible, the devices lack proper testing
methods and are potential time bombs waiting for one unfortunate moment of
mishap.
You've heard the stories about exploding
cell phones, and the cases are mostly attributed to Shanzhai devices.
Of course, there's also the part where it's
may be crippling the genuine smartphone industry. While Shanzhai devices aren't
directly in competition with premium products, it's the cheaper big-brand
models that are taking a hit. In Nokia's financial report in 2008, sales of
their N-series devices suffer a drop of 16.2% in the first quarter of the year
-- 21 million sets have just gone down to 17.6 million. Analysis shows that the
sales decline happens prominently in the China area.
Sometimes, the quality of the replication
may be so similar that several scamming tactics of selling Shanzhai products in
premium prices have cropped up over the years. People would order what they've
expected to be a full-priced iPhone 4S — only to discover a very well made
clone.
But should Shanzhai phones really go?
The undeniable, but mostly unseen, fact is
that these bootleg devices aren't merely cheap knock-offs of popular brands and
products. Because the competition is fierce among one another -- not counting
competition from the popular brands themselves -- Shanzhai manufacturers
usually end up innovating their products in order to stay at the top of phone
shelves.
Shanzhai phones have be known to include
features that even popular brands have yet to implement. Dual-sim capability is
a staple feature among most Shanzhai devices, something even the great iPhone
doesn't have. Some Shanzhai phones had the audacity of featuring a retractable
TV antenna — which works and adds to its charms. One hilarious infomercial
feature a smartphone that can survive being run over by a car (and yes, it
does).
The Shanzhai market is still, by and large,
catered towards the middle-class, lower-income group, and it's actually way
more than simply providing a trendy imitation for the customer's gratification.
As these people demand more in practicality for their money's worth, the
Shanzhai devices have to match these demands. The result is innovation matching
the people's needs over creating a niche or market for themselves.
It's this sort of demand, combined with
absolute creative freedom, that is the basis for technological innovation. The
Shanzhai market has already opened up the opportunity for people to construct
their own junkyard iPad. Who's to say that, in given time, that they couldn't
create a product that even WE would yearn for?
In the midst of imitating other brands and
their identity, Shanzhais -- these bootleg devices -- have actually crafted an
identity of its own. While the world may flinch and frown at its blatant
disregard for copyright or condemn its unsafe engineering, the fact is that
these phones are already part of a culture, and very much a culture in itself.
They're an industry, one with unending demands and growths. They're the
People's Phones: true "Shanzhais", as they may call it -- Robin Hoods
of the tech industry that steal the good names of the rich to be given to the
poor.
The breakdown of a bootleg phone – The
iPhone TV (2008)
The types of Shanzai mobile phones
White
Brand
Phones made by companies with a mobile
phone license, with the license being purchased from a legal holder. The phones
go through official testing, and are usually legally sold and exhibited.
Clones
Exact clones of branded phones, with the
brand logo and model number accurately branded on the phone. Users may not know
that they're counterfeits until they turn it on.
Imitation
Imitated phones that look like branded
phones, only with different logos printed on them. An iPhone clone by have a
slightly different logo bearing the name "Pinguo" (Chinese for
Apple).
Fakes
Fake devices that have the brand logo
printed on them even though the brand doesn't carry such a product. An example
would a Nike-branded smartphone.
Indigenous
Innovation
Knock-offs that narrow dodge copyright
infringements by including different and attractive features, such as dual-SIM
capabilities, TV functionality or donut-shaped motifs.
Rework
Phones that extract the main board of other
leading branded phones to be placed into different shells, usually more
attractive ones.
