
China's Cell Phone Pirates Are Bringing Down Middle Eastern Governments - codelion
http://www.fastcompany.com/1758927/how-chinas-cellphone-pirates-are-toppling-governments-in-india-and-the-middle-east
======
ars
Um, these are not counterfeit phones. They are just cheap phones.

"some analysts believe China’s bandit phone makers may now be targeting the
GCC region,"

What exactly makes them bandits? Sounds to me like they are totally legit. The
"Pirate" in the headline makes it sound like they are stealing bandwidth or
something, or perhaps hiding from the "Middle Eastern" government, when they
are doing no such thing.

It's just cheap phones. There is no law that says only Nokia is allowed to
make phones.

"Established players like Nokia were soon crying foul"

So only established players are allowed to make phones?

Does an otherwise good article really need "bandit" as bait to get people to
read it?

Retitle to it: "Cheap Chinese Cell Phones Are Bringing Down Middle Eastern
Governments".

~~~
pja
I think any phone with the words "Nkia" or "Blockberry" on could reasonably be
called counterfeit.

At the same time, I imagine that the buyers of these phones know exactly what
they're getting, so whether the companies in question have really lost out is
another question.

~~~
ars
Actually no, it needs to say the name properly to be counterfeit. (i.e. you
have to claim to actually be the company, not merely imitate their goods).

Messing up the name makes it a knockoff. Basically if you can easily tell by
looking who really made it then it's not counterfeit.

And either way it's certainly not "pirate" or "bandit".

~~~
etaty
I think the problem is that they don't own or have a license for the patents.

~~~
ars
If that were the case, then they would sue MediaTek.

Unlike the small manufacturers MediaTek is easy to find and it's a pretty
large company.

------
barrkel
_"[...] the strange way India’s mobile spectrum was auctioned off in 2008. A
last-minute rule change in the auction declared that licenses would be granted
on a first-come, first-served basis to anyone with completed paperwork and
$355 million in cash. [...] a haphazard process that netted only $2.7 billion
in licensing fees and may have left $39 billion on the table, according to
outside auditors."_

This is billed by the FastCompany article as corruption, and is apparently
being investigated as such, but it's not necessarily the case that the country
would have been better off if the government had collected that extra $39
billion. A proper auction will end up selling spectrum to those rentiers who
expect to get the most profits from the spectrum out of the public, and
(likely) can convince banks etc. to borrow enough to buy it. That in turn will
set a cost floor, and winners of the auction aren't able to reduce prices
below the cost of the capital. But by selling the spectrum cheaply,
telecommunication benefits have potential to be spread more widely, because
the cost floor is lower.

~~~
ajays
You're assuming the companies who got the spectrum did something with it. From
what I've heard, most of them just grabbed the spectrum and are sitting on it,
to collect the $39 Billion that would otherwise have gone to the government.
Imagine, a 1344% ROI!

~~~
barrkel
That's actually a separate issue: lack of genuine competition.

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r00fus
I don't see Android anywhere on there, but it's acknowledged that Android's
massive numbers are due in part to chinese manufacturers like Huawei and ZTC
and Android-derived OSs (OMS, Tapas: <http://www.asymco.com/2011/02/01/google-
as-android-vendor/> )

Hardware is cheap and commoditized in China due to the lack of IP
restrictions. However, smartphone software isn't so easy.

Are some or all of these "pirate phones" running a version of Android?

~~~
ZeroGravitas
Most accounts of OMS and Tapas (including Asymco) seem to do their best to
talk up their share in an attempt to downplay Android's success, and Google's
ability to profit from it.

However, OMS appears to be a failure as their fork couldn't keep up with
mainline Android, they missed their sales targets and accounted only for 0.3%
of Android sales last year rather than the 1% they hoped for.

But having said that, Mediatek have already announced a couple of revisions of
Android based boards including tablets. I'm sure they'll play an important
part in the Android story in future.

Also, Huawei and ZTE are amongst the biggest telecoms companies in the world.
You may not be familiar with the names (yet) but they probably built any
network branded 3G dongle you own as well as provide the equipment used to run
that network. They're a different thing from these "white-box" manufacturers
that are building phones like people built PCs from commodity parts.

------
jcfrei
This could be a huge opportunity for any aspiring entrepreneur with a
background in electrical engineering. Get hold of some mediatek kits and start
producing phones in africa.

~~~
quanticle
There are 2 problems with that strategy. First, its unlikely that the locally
produced phone will be at a price advantage. There's not much of a difference
between importing components and assembling the phone on-site and importing a
pre-assembled phone.

Second, the Chinese phone scene, in terms of innovation, is bigger than the
software scene in Silicon Valley. Its unlikely that any African manufacturer
would be able to match the Chinese hardware community in terms of innovation.

------
currywurst
Indian telcos are not affected much by handset prices per se. Carrier-locked
phones are getting rarer, as even providers who were CDMA-only are supporting
unlocked GSM handsets.

So, it's baffling why there is any link between the glut of cheap Chinese
phones and the spectrum scam !! Or why the availability of cheap handsets
should start a price war between carriers ?!

------
teyc
I wonder if this caused the demise of Nokia?

~~~
ZeroGravitas
The "burning platforms" leaked email specifically named this company as a
problem on the low-end and developing nations:

 _"Let’s not forget about the low-end price range. In 2008, MediaTek supplied
complete reference designs for phone chipsets, which enabled manufacturers in
the Shenzhen region of China to produce phones at an unbelievable pace. By
some accounts, this ecosystem now produces more than one third of the phones
sold globally – taking share from us in emerging markets."_

Mediatek now have complete Android reference platforms, and seem set to do the
same to the low-end of the smartphone market as all phones become smartphones.

~~~
teyc
Of historical note - the IBM PC was a de facto reference platform and the
Taiwanese were there too.

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Smrchy
This is not the link to the article. It shows a "Skip Ad" and then goes to the
homepage.

~~~
mooism2
It showed me a "Skip Ad", which when clicked on took me to the article.

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dimitar
This is getting ridiculous - Facebook, Twitter and not cheap cell phones
aren't bringing down governments - discontent people do.

~~~
vdm
Discontent people; communicating with each other, and the wider world.

