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Chinese Shanzhai Industry May Be Leading Consumer Electronics Innovation

The manufacturers of counterfeit products may in fact be pushing technological development faster then legitimate companies.

Naresh Kumar
Naresh Kumar on June 7, 2010.

Wired reports on the interesting phenomenon of small Chinese manufacturers who are paving the way for new technological innovation. These manufacturers reverse-engineer new, original devices from consumer electronics market leaders and improve upon their limitations, thus creating more innovative products, although with no warranty or transparent quality controls. Wired mentions the website, Shanzai.com, which tracks products and trends in the Chinese consumer technology arena:

In the past few months, shanzai.com has showcased a MacBook Air clone that, at just £170, improves in many ways on Apple’s £1,200 original: for a start it has two USB ports whereas the original has just one, runs Windows software, and comes with an extra 40GB of storage and a desktop remote control. Then there’s the first tri-band phone with a high-resolution projector inside — on the market for months before LG got in on the act with its own Expo Projector Phone — and the tiny 10.1-inch netbook with built-in DVD player.

The shanzhai industry consists of small businesses that take ‘inspiration’ from original products to produce their own, as an open platform for grassroots innovation and a radical new business model. Because of intense competition among shanzhai manufacturers, they always try to keep improving their products to respond to their customers’ needs in order to prevent them from defecting to their competitors. It’s also been proposed that the hundreds and thousands of shanzhai manufacturers in China may be leading the open-source movement for building better devices and that eventually, the market will clear out low-quality counterfeiters while the genuinely disruptive shanzhai manufacturers will emerge as strong, legitimate businesses.

Wired: “Chinese pirates are tech’s new innovators”

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