Shanzhai poised to launch Android attack

An article just published on www.ce.cn suggests that China’s shanzhai manufacturers are getting ready to flood the market with new Google Android OS-based smartphones. Citing multiple Shenzhen sources, the report says local manufacturers have been quietly building up knowledge and experience implementing the OS since late 2008, and have even targeted and brought onboard Android R&D personnel from companies like Samsung to speed development of the handsets, which are set to hit the market early in 2010.

One of the shanzhai companies, Sanjiguge, told the reporter that currently the market for the Android handsets is evenly divided between the domestic Chinese market and overseas areas mainly in South East Asia. Sanjiguge expects monthly shipments of around 20 000 units.

Cost is the big factor driving the China Android smartphone market. "Compared to other smart phone operating systems, Android is an open platform that can be embedded in any application software," said iSuppli China Research Director Wang Yang. And, when matched up against the expensive licensing fees for Windows Mobile systems, the implementation of Android can mean savings of USD 20-30 per unit – hugely attractive for shanzhai players who are dealing with increasingly meager margins.

To battle the big brand names such as HTC and Dopod, who recently released two new Android phones to market, the shanzhai players will of course focus on price. While the Dopod phones retail for USD 729 and USD 480 in China, shanzhai Android handsets are expected to sell for around USD 220, with the price to fall to under USD 150 once the market matures later next year.

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