SHENZHEN, China – Chinese companies who are seeking to upgrade from ODMs manufacturing non-branded boxes to designers of branded products will write the next chapter in the story of China’s electronics industry — but only if they can make the leap.
The buds of such transformations are visible everywhere here, in a city that has come to be known as the factory of the world.
A growing number of traditional design houses and white box vendors –who design products according to customer specs – are now trying, on the side, a new “branded” strategy for their new smartphones and tablets.
While success is hard to come by (these initiatives could easily disappear in a matter of months), many are resilient enough to re-emerge again under different brands.
Xiaomi, a wildly successful smartphone brand here, may be an exception to the rule. Started by Lei Jun, a key investor in the early Internet scene in China, Xiaomi demonstrates how a no-name brand in China can quickly rise to one of the top brands – a la Apple –through the heavy use of the Internet, focused brand marketing and a charismatic leader.
Xiaomi’s success hasn’t escaped the notice of China’s telecom equipment behemoths like ZTE and Huawei, who had been content as handset leaders on the business-to-business market.
Next, enter Nubia, a sub-brand created by ZTE just a year ago.
Ninety percent owned by ZTE, Nubia is a brand still virtually unknown in the West. But Nubia-branded smartphones are expected to find their way into the U.S. market later this year.
For an exclusive interview with EE Times at its headquarters here on Tuesday (March 27), a young, tall, friendly Ni Fei, CEO of Nubia entered a conference room, suited up in Adidas gym gear, with a spring in his step. Fei is in every sense the polar opposite to the senior executive you’d expect to meet at a stodgy Chinese telecommunication company like ZTE.
Ni Fei, CEO of Nubia
Something of a celebrity in China, Fei is 37 years old. Nubia’s Z5, the company’s first smartphone, seems to have been designed exactly for someone like Fei. Nubia’s “target audience” is said to be young, rich, tall, urban, its individuals craving recognition as taste-makers and disdainful of the less hip buyers of iPhones or Galaxy handsets.
Great coverage, Junko! It's rare to see any in-depth interviews with these sorts of folks.
It will be interesting to see whether ZTE will make any smartphone silicon like Huawei. And I wonder, what's so cool about the Xiomi phones.
Permit me to regale you with a relevant joke. Two Russian businessmen meet and talk:
"Thanks, I got it in Paris for $2000"
"You fool, you could get the same tie in Moscow for $4000!"
The point of this story is that the 'tall and rich' young people seek products that confer status on the buyer and therefore high price is not an issue. I don't think it makes sense but I suspect that's the target audience of the Xiaomi smartphone.
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