Unbranded mobile phone makers facing closures

Unbranded mobile phone makers facing closuresManufacturers and distributors of knock off phones in the Huaqiangbei district are slowly closing shops in the past months since more and more competition are growing fierce. A majority of the manufacturers were either closing down or started venturing in different electronic business after the government imposed stricter regulations on intellectual property protection.

There are around 3,000 manufacturers of unlicensed and unbranded mobiles phones found in Huaqiangbei. Around 228 million mobile phones were made in this industrial area in 2010 an increase of 43 percent from the previous year, but sales for this year is expected to slow down 12 percent after a downturn due to costs and unfavorable policy environment. Manufacturers were facing competition from Nokia and Samsung since their prices are much lower.

Phone buyers now have higher requirements in looking for mobile phones, and more buyers are buying branded phones plus around 300 new brands of registered mobile phones are released in the market since last year. For a unbranded mobile phone maker to release a new model the need to invest around one million yuan. Investing in making new mobile phones will help maintain their market share of unbranded phones but with a risk of bankruptcy if it doesn’t sell well.

This risk have forced companies to go out of business, and many said the knockoff mobile phone industry should undergo restructuring. With newer and intense market competition will surely out phase manufacturers, while those with a strong research and development ability will stay a little longer.

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