Although starting out by copying the technologies of other companies, some IT firms in Taiwan and China have transformed into innovative brands in their own right. Picture: Huawei Technologies Co Ltd at an exhibition on Oct. 22, 2010. (File Photo/CFP)
Capitalizing on the overwhelming popularity of copycat cell phones, Huawei Technologies Co., has become a leading telecom solutions provider in China, while Taiwan's chip-design company MediaTek Inc. is making waves in the cell phone business by offering low-cost chips to white-box handset makers.
With the development of its 3G terminals, Huawei aims to achieve 10 billion yuan in sales in China this year, said Yang Xiaozhong, head of Huawei's China terminals division. He added that, so far, 8 billon yuan had been generated by selling terminals.
In fact, in the third quarter of this year, Huawei's shipments of terminals also hit a new record, soaring past 25 million units, Yang said.
Yang said that Huawei's success could be attributed to its co-operation with telecom operators, particularly with China Telecom, which had significantly boosted its CDMA mobile phone business.
Huawei is now the second-largest 3G mobile phone supplier; its 3G mobile phone sales are expected to reach 10 million units this year.
As for MediaTek, industry insiders said that its cell phone chips had sparked an explosive growth in the sales of copycat cell phones, although MediaTek's own market share of chips in China had dwindled because of fierce competition and several price cuts this year.
However, MediaTek seems to be determined in recapturing the chip market after it began shipping a smartphone chip for Google's Android platform this year.
The new chip, although highly priced, offers a very easy connection over bluetooth, Wi-Fi and GPS. If shipments of the chip rise, MediaTek's business and earnings are expected receive a big boost.
Although the popularity of copycat cell phones has drawn widespread criticism, Yang Xue-shan, vice minister of Industry and Information Technology, has defended the phenomenon, saying that copycat versions were a necessary step from imitation to innovation. He said Huawei's successful transformation from a low-priced, copycat product manufacturer into an original product manufacturer was a good example.
Yang also said that the ministry would support the manufacture of copycat products if they did not involve any patent infringements.
He said that the ministry would work to strike a balance between the protection of intellectual property rights of developers and the interests of users.
Furthermore, Wang Jian, chairman of the International Business Research Center at the Beijing-based University of International Business and Economics, said that fake versions of branded products were little more than gimmicks and were usually used as a marketing tool.
Many copycat products are very similar to genuine branded goods only in appearance and the manufacture of such products did not infringe on any company's intellectual property rights, Wang added.
The low prices of copycat products could also help device manufacturers increase their market shares, he said.
Huawei Technologies Co., 華為終端公司
Yang Xiaozhong 楊曉忠
China Telecom 中國電信
Yang Xue-shan 楊學山