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Manufacturers race for 'Made in China' smart phone
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CNTV, December 12, 2011
The phrase "Made in China" has become somewhat synonymous for getting what you need on the cheap. Some Chinese phone manufacturers have made a fortune over the last decade -- with rising competition driven by copy-cat designs. Now, the smart phone race is definitely on -- but will the industry survive and thrive amid cut-throat competition?
A 20 month-old company - that’s sold 300,000 phones in just 4 months. Lei Jun is the owner of Xiaomi Technology. He’s sometimes called the "Chinese Steve Jobs".
At this Apple style press conference, it’s easy to see why. With more advanced hardware than an iphone, this Chinese smart phone costs less than 2,000 yuan or about 300 US dollars -- less than half the price of the latest iphone.
Most of the development costs went into the hardware. But Lei Jun, a fan of Steve Jobs, said he believes it’s a business model that works.
Lei Jun, CEO of Xiaomi Corporation, said, "If everybody used my Xiaomi Phone, there would be a huge platform. Ten years ago, nobody would have thought free search engines like Baidu could make money. Because customers carry their phones 24/7, I believe there will be ways to earn money. But right now, I’m not sure exactly how."
His company, founded in April 2010, is now estimated to be worth about half a billion US dollars. The smart phone is their only product.
Meng Yao, a customer, said, "This is by far the best smart phone based on the Android system. The price is very attractive. Especially for Chinese people, it’s affordable."
Prices have long been seen as China’s biggest advantage in the mobile phone industry. The last decade has seen cheap copy-cat phones snapped up by China’s medium and low-income population.
But through 2011, the copy-cat industry has been shrinking, amid growing demand for smart phones. One recent survey says there are now half a billion smart phone users in China.
Lei Jun believes China has a chance to compete globally in this new mobile era.
Lei Jun, CEO of Xiaomi Corporation, said, "First, Chinese companies are capable of reducing productions costs. Second, we can still improve quality. Now, most smart phones use a standardized CPU, and more than half are operating on Google’s android system. This offers China a big chance to build top smart phone brands."
In this bustling office crowed with young engineers and salesman, a quiet combat is taking place to compete with other globally well know smart phone makers. In this new mobile internet era, China faces fierce competition. But as these young people said, this is a challenge they are willing to take.
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