Our earlier posts discussed the electronics markets and ecosystem in Shenzhen. A common conception is that China is known for cheap copies and knockoffs of brand products. From what we saw this is still true. Shenzhen has an entire Copy Mall that sells mostly imitation Gucci handbags and such. There are also palette loads of locally produced Android phones, “iPhones”, and other faux brand consumer electronic products.
We saw some “Apple Watches” that miraculously were on sale before the watch was officially released. Running iOS. Hmmm. Most cell phone markets carried batteries. “What kind do you need? Here, I’ll put a Samsung label on that generic silver battery (while you watch). Now you have a Samsung battery. You need a Nokia battery? No problem. I have labels for those, too.” The ubiquitous Postek g3106 label printer is all over the markets. It prints really nice labels that you can stick on anything. “A business in a box” as one of our hosts describes it.
Innovation in Electronics
But this is where is gets interesting. There are things going on in Shenzhen that have not taken root yet in the west, or at least are done very differently.
Our hosts (Dangerous Prototypes) designed the Bus Pirate. It’s a pretty complete protocol and logic analyzer for prototyping, testing and debugging new chips and systems. It’s not a $3000 piece of bench equipment, more like $30. You provide your own power supply and case.
Similarly, the Arduboy was just released last week – a complete portable Arduino development system disguised as a miniature gameboy replica. There are a lot of these little projects coming out of Shenzhen or otherwise leveraging the Shenzhen ecosystem. Shenzhen quietly powers a lot of the projects that show up on Kickstarter, Indiegogo, Dragon Innovation, Tindie, Etsy, and other crowdfunding and sales venues.
DJI is the current poster child example of Shenzhen innovation. They are considered the top company in the small drone market, although many US flyers don’t know they are a Chinese company. They move faster than anyone and are less hampered by the FAA’s retro position on drones. They are currently going for more funding at some ridiculously high valuation, which they may get as their sales were estimated at over $500M last year.
Innovation on the Go
We saw people motoring around on these one-wheel self balancing scooters.
These are starting to get noticed in the US, but they’ve been in China for a while now. The path to a one-wheel scooter makes sense when you look at the local situation. Asian cities grow really big, really fast. Used to be they were choked with 2 stroke Mopeds along with all that noise and pollution. These were banned and electric bikes showed up. So the factories made lots of wheels, batteries, electric motors, and power control electronics. Not a big leap to add an accelerometer and some inverted pendulum control software (really, it’s high-school physics). This one talks to you in Chinese and has bluetooth speakers so you can listen to you music while you motor. Why not? Speakers and bluetooth are cheap. All in, it was under $250.
What we found when we looked inside the scooter was interesting. There was no name-brand silicon. All the electronics parts were old style transistors and microcontrollers – in existence for decades. Cockroachs of the Industry, as a colleague describes them. Many of the designs are done this way because the economics favor it. You’ll see brand new products with generic electronics in the design.
Most chip manufacturers release a new generation of microprocessors, power controllers, amplifiers… every few years. These are usually better parts with better specs and are the result of hard won R&D. Typically the new parts defend the same price point and obsolete the older parts. The old parts become “NRND” – Not Recommended for New Designs, but most are still perfectly good parts – just with yesterday’s specs. Meanwhile the old parts don’t actually get any cheaper, in fact they can get WAY more expensive as they approach their obsolescence point. A customer of ours uses a 1990’s vintage microcontroller chip that costs $20 and can be replaced with a $3 part. But it would cost them more to change the design than they would save on the chip. So they live with the high pricing.
But the Chinese factories seem to keep producing the same old parts, year after year, and competition makes them get cheaper and cheaper. We’ve never seen so many DB9 connectors or 8051 microntrollers, but hey, they’re cheap. Cockroaches. Around forever.
In our next and final part (for a while) we’ll do a short post about some of the practical aspects of travel to Shenzhen and doing business there from what we’ve learned so far.