Bunnie Huang on China's "Shanzai" Mash-Up Design Shops

saccade.com writes "Bunnie (of XBox hacking and Chumby fame) has written an insightful post about how a new phenomena emerging out of China called 'Shanzai' has impacted the electronics business there. A new class of innovators, they're going beyond merely copying western designs to producing electronic "mash-ups" to create new products. Bootstrapped on small amounts of capital, they range from shops of just a few people to a few hundred. They rapidly create new products, and use an "open source" style design community where design ideas and component lists are shared."

Comments

Re:Smart; Very smart

[Anonymous Coward]

Our IP is getting in our way. That is why our forefathers created SHORT TERM IP rights. Now, it is just a money maker for a bit longer, but is KILLING the west.

Not to mention the 150 year-after-Disneys-death copyright. That really helps preserve the wealth of the rich, but at the cost of a stagnating society.

Remind me again, how did Apple start?

[KlaymenDK]

Remind me again, how did Apple start?

I think that this sounds more like a new type of consumer-producer than just piracy, and that the "mash-up" is an apt comparison.
These guys may end up revamping a part of the market with their "hardware shareware", and if they do, I say more power to them. Especially since they are doing more than just plain copies, they are producing products that are, arguably, "improved" models.

Quoth the article, "contemporary shanzhai are rebellious, individualistic, underground, and self-empowered innovators" ... which one of those does the marketplace *not* need? (Mark you, I say "need", not "want"; I'm quite sure they want none of it, but will nonetheless have more of it than they like.)

Re:MBA shortsightedness

[Hal_Porter]

You joke about this but it does happen. I've worked on projects where there are people working all over the place. E.g. Euro/US company designs something and manufactures it in China and the software is done by an Indiam company.

So far, so conventional. But the Chinese are often just assembling parts that come from the US (e.g. processors from Intel, components from Europe, displays from Korea and batteries from Japan) and immediately exporting them. And the Indian company might subcontract work back to Europe or to the US. It's simplistic to say that work has moved from Europe/the US to China/India, it's more accurate to say that China and India have joined in networks that were global before.

And it's also simplistic to say that jobs are always moved from high wage countries to low wage ones. I've seen projects move from the US to Northern Europe for instance, or from Eastern Europe to Western Europe.

The other thing is that labour costs aren't everything. If you have an efficient company making components they are a tiny fraction of your gross sales. Finally there's a pecking order in terms of where the money ends up - and low wage low skill places are not very high in it. A factory in China makes a tiny percentage of the sticker price on a laptop - most of it stays in the country it was bought or was used to buy parts for import. Most of those Indian consultancy companies are going to end up going bust because they bill several clients for one hour of developer time and thus have a low perceived productivity. The few good ones that survive are quickly going to start charging the same rates that US or European companies charge.

Back when Indian and China opened up I thought it would gut engineering in rich countries. That hasn't happened and my few trips to both places tells me it won't happen. Probably consultancy rates would have been 10% higher if they weren't there, if that.