A nice article in another blog

The future is "Shanzhai", faking it for real


A recent article in the People's Daily Online reminded me of a recent experience in China. On numerous occasions I was offered a fake iphone. Given the technical quality of this product it amazed me that such an item could be faked in the sense that it actually worked and how it could be done so cheaply. Whilst this shows up the profit margins that Apple must make on these products it also shows the skills that are inherent in Chinese firms. Even replication takes considerable effort.It turns out that the market for fakes has a name - "Shanzhai". This article is interesting on many levels but does suggest that Western brands are fighting a losing battle in China.I am still left a little confused.

Take this quote from the article below:
Xiang said compared with real ones, there was still some way to go in terms of functions, quality and after-sale services, but these "Shanzhai" items were still worth buying."They were usable and cheap. They look exactly like real ones and make me cool. That's enough for me," Xiang said.

Now I understand the "coolness" bit but this suggests that a fake iphone will look like an iphone but not work like an iphone. However, at least some elements must work even if it is just the phone bit. It is not hard to see why demand would be so high it such a status driven country that is just discovering the joys of capitalism and conspicuous consumption.The Hiphone maker is also refreshingly honest stating that he accepts that Apple might sue him. I expect by then the profits will have been safely stashed away and the company will disappear - IF Apple are ever able to find him. The costs are small and the gains are huge.It looks like the word "Shanzhai" has gone mainstream.More importantly, China is only going though the stage of development that was followed by Japan in the 1980s. Japan imitated and then realised it that it could do better than the West. China is merely following this well trodden path to development. The West innovates and provides the creative spark, the East copies, improves and takes the products mainstream at a cheaper price.The only solution for the West is to keep running to stand still and maintain high levels of R&D spending as China is catching up very fast.

for details about Shanzhai mobile phones, check www.babikenshop.com and www.babiken.com