The Nanfang / Blog


Knock-off mobile phone makers run into trouble in Shenzhen

Posted: 03/9/2011 6:00 am

The prices of mobile phones are going down faster than a beer at a frat house, and that is causing problems for some of China’s “no name” brand phones. Huaqiangbei is famous for being ground zero for mobile phones in Shenzhen, but declining prices on legitimate brands such as Nokia and Samsung are putting the squeeze on manufacturers. The Shenzhen Daily reports there are 3,000 manufacturers of knock-off (more commonly known as shanzhai) mobile phones in the Huaqiangbei area, and sales are down 12% already this year.

Phone buyers now have higher requirements in looking for mobile phones, and more buyers are buying branded phones plus around 300 new brands of registered mobile phones are released in the market since last year. For a unbranded mobile phone maker to release a new model the need to invest around one million yuan. Investing in making new mobile phones will help maintain their market share of unbranded phones but with a risk of bankruptcy if it doesn’t sell well.

This risk have forced companies to go out of business, and many said the knockoff mobile phone industry should undergo restructuring. With newer and intense market competition will surely out phase manufacturers, while those with a strong research and development ability will stay a little longer.

In nearby Hong Kong, some Nokia-branded phones are being given away with the purchase of other electronic items, underscoring how far their value has plummeted in recent years.

As bleak as the picture seems for knock-off mobile phone makers, Huaqiangbei, at last check, still had a vast selection of devices. So no need to panic…. yet.

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