longer content to churn out cheaply-made handsets in their millions,
China is seeking to become a major force in handset design.

Local design of handsets reached 129m units in 2006, with that
number expected to grow to 170m in 2007 due to increasing shipments
from Chinese handset OEMs, original design manufacturers (ODMs) and
independent design houses , says iSuppli, the US-based research house.

Chinese domestic handset OEMs will continue to strengthen their
in-house design capabilities in order to decrease the risk of
over-reliance on the external design houses. Nevertheless, I suspect it
will be many years before Chinese OEMs achieve the sort of reputation
for innovative design that major foreign brands like Nokia, Motorola
and Samsung enjoy today.

And of course, there remains the big problem of plagiarism. Many of
the handset designs coming out of China today — such as the Telsda
handset pictured — look remarkably similar to the designs of
better-known western OEMs.

The trend of Chinese electronics firms moving up the value chain is
significant, nevertheless, and it is having an impact in many other
product areas besides mobile phones.

For example, of the 70m colour television shipments in China in
2006, iSuppli says 20m were produced by ODMs and electronic
manufacturing services (EMS) providers. With several dozen digital TV
design houses emerging in China, they are beginning to provide both
semi-knock-down (SKD) and complete knock-down (CKD) services
domestically in cooperation with semiconductor suppliers.

CKD and SKD refer to types of manufacturing in which products are
sold in kit form, for later reassembly. CKD/SKD was pioneered in the
automotive industry, and is usually done internationally, to exploit
low labour rates and save on import/export tariffs.

More on China's ambitions in electronics design in this earlier story.

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