The Silicon Valley of Hardware

When I read The Hardware Hacker, the part that stood out the most was when bunnie discussed Shenzhen, China. I don’t remember ever hearing about the city until recently and it was actually in relation to the book. Shenzhen is where most of our electronics or (and components) come from. Foxconn, located in Shenzhen, is probably the largest electronics manufacturer in the world. They make most of Apple’s devices as well products for other big companies like HP and Microsoft.

With all of the factories producing electronics in the area, they also have the largest electronics component market in the world where you can buy anything you can imagine. Due to the supply chain and access to manufacturing, if you hook up with the right people in Shenzhen you can get a first prototype of your product created in as little as a few days. Plus, the costs there are much cheaper than anything you can buy or get done in the United States. In his book bunnie wrote…

The trouble is that aside from the label on the product that says “Made in China” or “Made in the USA,” consumers really don’t care about the manufacturing process. What markup would you pay for a gadget that said “Made in the USA” on it? The cost premium for US labor is 10 times what it is in China. Think about it: can the average US factory worker be 10 times more productive than the average Chinese factory worker? It’s a hard multiplier to play against.

Remember this the next time Trump says Apple should manufacture everything here instead of in China. Would any of us pay several thousand dollars for an iPhone? I doubt it.

With access to so much technology in Shenzhen, there is a subculture there called the shanzhai. They’re responsible for most of the copycat products you’ve probably heard about. For example, a really good iPhone clone in China might sell for 1/7th the price of a real one in the States. As you might have guessed, IP is treated differently in China than in the United States.

To give a flavor of how this is viewed in China, I heard a local comment about how great it was that the shanzhai could not only make an iPhone clone, they could improve it by giving the clone a user-replaceable battery. US law would come down on the side of this activity being illegal and infringing, but given the fecundity of mashup on the web, I can’t help but wonder out loud if mashup in hardware is all that bad. I feel there is definitely a bias in the US that “if it’s strange and it happens in China it must be bad”, which casts a long shadow over objective evaluation of new cultural phenomenon that could eventually be very relevant to the US.

Tech Trend: Shanzhai by bunnie

The speed at which the shanzhai operate and iterate is impressive and exciting. I’ve read about it being similar to the early days of computers, where people like Steve Jobs and Steve Wozniak were sharing their projects and it was pretty much all open source hardware at the time. Some of that is coming back with the maker movement, but it seems like IP and copyright stall innovation so much in the United States. This is why I’m so proud to work for Automattic, where we place a high value on sharing with the world by open sourcing as much as we can.

bunnie teamed up with WIRED for a documentary on Shenzhen. Here’s the trailer for it.

It’s really good. You can watch the full documentary on YouTube, which is 68 minutes long. If you prefer bite-sized segments, it’s also available in parts 1, 2, 3, and 4.

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