Shanzhai Gadgets, A Tough Problem

Big screen, keyboard, nice slim design, 3G chipset, camera… Will you guess it a new gadget from Blackberry or Nokia? But you are totally wrong. There are a bunch of low cost phones carry those modules that the Shanzhai ecosystem has been producing for months with increasing quality. As the software improves, Shanzhai gadgets can provide customers more than their expectation at a cheaper price.

The Shanzhai phone makers in China becomes a big competitor for all gadget manufacturers especially those make profit from lower-income market. Nokia is the first being affected. Chinese Shanzhai phone cream Nokia in every market from China and India to Thailand.  Nokia went from 70% share in India 2007 to under 40% today.

Nokia is not the only victim. Blackberry is also the loser. Their core value point ‘Push Mail’ is now losing its share because of the real time messaging platform deploying on dozens of gadgets. There are many cell phones with this function cost less more than Blackberry. Market researchers estimate Blackberry will lose most its market if the volume of international units decrease.

We see many Asian are interested in these low cost Shanzhai phones.  They do not so cared about quality or brand. The Shanzhai gadgets offer them a cheap price but with many attractive functions.  Shanzhai phones’ quality also support users  hold them for a relatively long time when referred to its cost.

Now Shanzhai companies are more ambitious  starting into the Android market. They have made low cost Android phones in a unimaginable low price: $100. When the quality of these phone are increased to a acceptable level, we will see a sales explode of these gadgets.

Though most of Shanzhai gadgets are just counterfeit now. Gadgets companies should pay more attention on them now. Don’t look down upon Shanzhai manufactures. They learn faster than any giant.