Global Value Chains and the Innovation of the Chinese Mobile Phone Industry

Yuqing Xing

No 19-14, GRIPS Discussion Papers from National Graduate Institute for Policy Studies

Abstract: Global Value chains (GVC) provide a new channel of innovation for firms participating in value chains or utilizing the value chain strategy to grow. Upgrading to high value added segments of GVCs step by step is a linear model of innovation. Our analysis on the Chinese firms involved in the value chain of the iPhone shows that the Chinese mobile industry has climbed up ladders of the iPhone value chain and performed relatively sophisticated tasks beyond simple assembly. In addition, by examining foreign value added and technology embedded in the smartphones of OPPO, Xiaomi and Huawei, we argue the Chinese smartphone vendors primarily follow a non-linear model of innovation, jumping directly to brand development before acquiring sufficient technology capacity. They have been focusing on incremental innovations and product differentiation by taking advantage of available technology platforms. The value chain strategy enabled them to overcome technology deficiency effectively and opened a short-cut to catch-up foreign rivals and evolve into leading smartphone makers in both domestic and foreign markets.

Pages: 24 pages
Date: 2019-08
New Economics Papers: this item is included in nep-ind, nep-int, nep-pay, nep-tid and nep-tra
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Journal Article: Global Value Chains and the Innovation of the Chinese Mobile Phone Industry (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ngi:dpaper:19-14

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