“Bandit” phone makers build up brands
When Mei Saichun hosts visitors to his handset factory, he has a surprise for them. After a tour of the decidely low-tech assembly lines, the general manager of Shenzhen Xinghuabao Electronics returns to his office and opens a door behind his desk. On the other side is a cleanroom where workers in white protective clothing are assembling handset displays behind windows and airlocks. The high-tec lab, which opened only in December, highlights a strategy shift. After years of competing on price only, Xinghuabao is trying to move upmarket. “We are legitimate set makers now. We are building our own brand,” says Jin Hongxiang, president of SOP, Xinghuabao’s parent company. “We are expanding upstream to have more control over the quality of our components.” The company’s move is part of a broader trend. As Shenzhen’s “bandit” handset makers have started flooding the global market, they are meeting increasing regulatory and cost issues that are forcing them to adapt. Financial Times – 17 Feb 2010