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Knockoff Tech Selling Better Than the Original
An anonymous reader writes to mention an IT Wire story about the industrious Chinese industry centered around reproducing commercial products. These individuals have become so adept at forging based on the original that by the time the developer of the technology comes to market, the 'original' is seen as 'fake' by consumers. Other products, such as shoes, CDs, DVDs, and even expensive cars are available for much lower prices in certain Chinese markets. From the article: "Sell these products do, especially in Asia where the prices are low, few questions are asked and in many cases, the quality is actually pretty good. Samsung is said to have been so concerned by seeing its phones copied on the Chinese market that it tracked the distribution channels back to the source and discovered the electronics guys responsible for copying their latest products. After offering them a job with Samsung and a chance to go legitimate, they are reported to have declined the offer, saying that they were able to make more money by simply continuing in their pirate ways. What Samsung did next is not known."
The more you regulate a company, the worse its products become.
This is a downside to manufacturing in China. Even legitimate factories will order parts from a BOM and make illegit items after they fill your order. this is the risk in sending your IP to China to be made on the cheap.
... but if the knockoff alternatives lack the DRM that the authentic products contain, I'd probably consider purchasing the knockoff as well.
You know, the fact that China has managed to become the manufacturing center it has is rather astounding. They turn around and steal the technology of the companies who have decided to put plants there. Their system of law is simply unpredictable. By and large, companies who moved there should have known better. As irritated as outsourcing to India has been, in retrospect, we should have made a more concentrated effort in making India, rather than China, the mass-manufacturing center for the American market. India has a few things going for it that China probably never will. First and foremost, they have a republican (small r) system of government. They have benefitted from hundreds of years of English Common Law, which is arguably what makes Biz so seamless and efficient (relatively speaking) in the UK, US, and Canada. Finally, they don't seem to have an appetite for superpower status. We picked the wrong country to invest in. If I owned a manufacturing company, I'd get the heck out of China.
I'm not saying it is good for the business. It is very bad for the business. The customers, however, will enjoy the short term benefit of low prices. The customers will also likely suffer fewer innovations because companies like Samsung don't want to waste money coming up with new features that will just get copied.
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Now that China is starting to develop IP of their own it will be interesting to see how they react when other countries pirate it. I doubt they'll say "it's ok."
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Samsung won't do anything about it. They're trying to clean up their image (in the past when fined by the government, officials would just vanish and their problem would disappear - nowadays they pay the fine and suck it up, because their international image is more important).
That, and the fact these pirates are most likely backed by the triads, in turn backed by corrupt Chinese officials. For as much power as Samsung's old family cartel hold in South Korea, I don't think anyone on the planet wants to screw with the Chinese. Only the biggest idiot in the world would try to solve a problem with the triads through violence.
I fail to follow your reasoning here. I remember when I paid $240 for an 80mB disk. Today I can get 500gB for $240. How could anyone get a 6000-fold reduction in price without R&D? Any cost-cutting the bean counters do is irrelevant compared to what R&D will get.
If a technology company wants to prevail in the marketplace, what they need to do is to keep R&D so intense that the copycats will not be able do duplicate the performance of genuine products.
"Without value in IP, there is no economic reason to innovate"
While you can debate whether IP is an absolute right, human rights violation, or somewhere in between. Your statement that innovation will not happen without "value in IP" is verifiably false. Just look at the vast majority of human history.
Also known as a strawman argument.
Sure there is. Without innovation a company has no advantage over its competitors. To make a profit you have to either sell something different or produce the same thing more efficiently. Both of these require innovation.
The manufacturers of the "genuine" products will need to compete based on price.
And how do you compete based on price with a company that does not have any R&D costs?
Downsizing on R&D will not be enough, as their R&D is (practically) zero.
Ah, I see! You propose that the whole world must stop innovating, because it clearly does not pay!
I'd say: let the Chinese do within their borders what they like, but sue every bastard that imports these counterfeit goods.
Stealing someone else's technology and creating a better selling product with it? Microsoft practically invented the concept.
"Outright theft" tends to comprise theft rather than non-theft. Of course, this piracy indirectly deprives others of resources, but then again, so does capitalism.
So, this is capitalism, and it is indirect theft.
English is easier said than done.
As most of us know, the rules of patents and copyrights are there to allow an innovator to recoup expenses and some profit. We have taken it to the point where the rules are now used to insure financial security for the entire corporation into perpetuity. It seems like now that manufacture is so cheap, and the design process is so streamlined, that the big shops should be able to get a products refreshed pretty frequently. The big reason that large firms cannot is the sheer amount of overhead these mammoth corporations carry. Many will complain, like the car companies, that things like health care adds 5-10% to every car. But how much does overhead like luxury building, private airplanes, and golden parachutes add?
Perhaps if money was put into hiring and training people, and encouraging innovation, we would have nothing to fear from the knockoff artist.
"She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
Okay, so I find that my Super Duper Gizmo is duplicated and sold very cheaply by a company that didn't have to expend any money on research and development. I can no longer sell my original Gizmo, because someone has undercut me.
So I head back to the drawing board. I work with my customers, I do some market research, I find out what everyone wants and/or will want, I hire some top-notch people who know Gizmos, I go and develop Super Duper Gizmo Plus Plus. Mere seconds after my product hits the market, I've found that someone is already producing knockoffs and selling it at dirt cheap prices, prices that I cannot justify because I could never recoup my investment to develop the product.
Maybe my process is crap. So, I hit the drawing board again, splitting my costs between making Super Duper Gizmo 2007 Extreme, and improving my manufacturing and go-to-market capabilities. But guess what happens? I hit the market with Super Duper Gizmo 2007 Extreme, and seconds later, I find the exact same product, sold under a different name, for chump change, which I of course cannot match because of the money I spent developing my product.
Maybe I'm in the wrong game. I should just stick to manufacturing. That's the only place where I can actually make any money. Trying to make innovative products has proven to me to be a complete waste of money.
Now a whole lot of companies have moved to just copy and manufacture, or copy and add the smallest delta to a product where they can justify spending money to make a few pennies more than their competitors. In 2017, the only product anyone makes is Super Duper Gizmo 2017, which is merely the Super Duper Gizmo 2007 Extreme with a new paint job (colors are cheap to do), a different menu ordering (switching strings in the program is cheap to do), and square buttons instead of round buttons (changing the tooling to make square buttons is cheap to do).
Why innovate? Where is the incentive to innovate? I create a new product, it gets stolen from right under me. I improve my process, but can't add any new features to my product because I've spent it on the process, so now the product is stale, and no one wants it.
It's a no-win situation.
No. Windows Genuine Advantage doesn't help the least against imitation.
And honestly, I rather prefer the imitation.
Do not trust this signature.
You had it right except the "better" part. There is an old saying. "Good artists copy, great artists steal." MSFT copies Apple and does a shitty job of it like these knock off artists in China. Apple sometimes steals ideas from linux and even MSFT but recreate them in a way that look better than the original. That is the difference between good and great artists.
Jesus was a compassionate social conservative who called individuals to sin no more.
It's all about the pricing and availability of goods. Go do an inventory of your house, or even just your bedroom, and find how many of your things are imported.
And now that lower-skilled jobs are being exported over there, fewer Americans can fit the "union tax" into their budgets, assuming the US goods meet the same quality.
You do fly on planes with knock-off parts
Sure they look very similar but fake? The phone isn't claiming to be an LG, or the game a PSP as far as I can see. It's a clone, not a fake. It's not like the phone and other tech manufacturers don't rip each other off mercilessly. Do you believe for a second that companies don't "reverse engineer" each other's products within minutes of them hitting the street? Before if they can find a way get away with it.
Really what they're pissed about is the fact that the chinese are just better at it than they are.
The solution? Release the stuff in China first, nobody wants to be seen to have a knock off. Hell, it has by far the biggest market so it even makes sense.
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Why the dollar store. Just every foodstore in good old USA. What do you thing American Budweiser is? A badly done fake imitation of the real Budweiser brewed in the Chech republic for 300+ years now.
China is simply undergoing the same process as the USA did 120-130 years ago. The only difference is that American "businessmen" at the time were faking European brand goods while Chinese are now faking Japanese and American.
Nothing surprising here. Once their own brands appear in quantity they will suddenly become trade mark aware. The way the USA did.
Baker's Law: Misery no longer loves company. Nowadays it insists on it
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1400's... let's see... did companies spend billions of dollars in the 1400's developing new butter churns and buggy whips? Did they have instant global communications with which to spread the inventions? Did they have CNC milling machines that could create virtually any simple object that you can imagine, with just a few buttons?
No it won't.
Truth is, we are gonna get exactly what we have comming to us if we don't pull our head out
Getting a manufacturing plant online takes a lot less time than you might imagine.
I think it takes much much more time than you think. You seem to be presuming that there are companies out there that copy everyone else's products. However, most products fail miserably. They only copy the successful ones. So, define successful. Then, get people to fund the copying of successful. After all that, then the minor time to retool that you claim to be the only time necessary to copy something. The total time from my release of the best product ever (with no patents protecting it) and a serious competitor is at least a year, and probably closer to 2 years at the soonest. For something "new" or something that seems another entry into a crowded market (iPod), I would expect that the wait time would be greater and it might be 3-5 years for someone to make serious copies. If trademarks are enforced (and they are in the US, even if China lets the fakes be made with names that are exact copies too), the 2 year head start will be sufficiently differentiating for the product to be self sustaning in a sea of exact duplicates of a lower price. If you think that I'm incorrect, take a look at things that aren't protected, like PC assembly. Dell, despite having little to do with the actual making of the parts of a computer that do the work and whose parts are mostly available wholesale from the manufacturer, still has a name for itself. It does sell computers for more than many competitors, and sells more of them. Anyone could take Dell's specifications and make their own computer just like it for 10% less, but they won't sell as many of them as Dell.
So, in the real world, your argument has been recognized, examined, and proven by business practices to be simply wrong. A complete lack of patents and copyright would increase innovation. A complete lack of patents and copyrights would still allow for creators to make a profit. It may be more inconvenient. It may be more risky. But it would still be there. IP hold back innovation and progress. IP no longer promotes it.
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In India, we also make up stories like you do. But we call them fiction.