Cost Saving by Global Mobile Phone Giants Taught the Art of Mobile Device Innovation to Chinese Players


In between 2000 to 2005, most of the global Mobile Phone Giants like Motorola, Samsung, Sony, Ericsson, Panasonic, Sharp and many more battled hard to capture or recapture the lost market share. The dynamic change in Mobile Device design led by Samsung Camera phone took the other giants like Nokia and Motorola by surprise and start gaining market share in Europe which used to be the cash cow of these giants.

During that period, Chinese Mobile device user's generally opted for global brand in the lieu of missing local players. Most of the global giants bought manufacturing space in Chinese ODM's to ensure the lost cost of production to maintain the fat margin to support their very high cost oriented research and development team whereas the local Chinese ODM's were happy with their business and revenue model.

The entry of Open Source Android on the one side gave a flip to new era of innovation to Device OEM's with their own flavor of Android with multiple differentiated features. Most of them used to take the help of ODM' resources to get the features implemented before giving  a go-ahead to ODM for mass production.

The Strategic move of global player to consider Chinese ODM's as manufacturer turned out as suicidal. The continuous half a decade training to thousands of Chinese ODM's resources acted like a backbone of new revolution within Mobility Industry as they started designing their own devices and first penetrated into local and surrounding market place. The sudden loss of market share of Motorola and Nokia in China encouraged the local government and they offered special economic help to innovators to start their own Mobility brand.

By 2010-11, many small time ODM player of 2005 era became the giant of mobility business in China as well as in oversees market. The speed of innovations, speed of execution while keeping the cost low completely knocked out many global giants. Motorola got into trouble even after very successful product of Razor in 2005 to 2007 and got sold out to one then ultimately landed in Chinese player kitty. Once the supplier became the owner of Motorola. Sony Ericsson faced the similar fate and it forced Ericsson to sell its stake to Sony. Samsung lost its position in China.

In my opinion, It was not the strategic blunder of Global giant but the Government rule related to salaries and taxes. For example, Finnish government took Nokiaas money minting machine and completely failed to promote and protect the organization at the time of need. On a contrary, Apple strategy worked fantastically due to their very secretive nature when it comes to their software and hardware business. 

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Visionary Leader with 22 years of multi-functional experience - combine astute tactical, strategic, business, technology and industry skills in ICT domain at domestic and international level (Wired/Wireless/ networks /platforms/ connected device) .... More

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