Domestic Value Added of Chinese Brand Mobile Phones

In this paper, we evaluate the domestic value added of Chinese brand mobile phones using the teardown data of two sample phones: Xiaomi MIX 2 and OPPO R11s. For calculation of the distribution of value added by country, we adopt two benchmarks: production cost and retail price. In terms of the production cost of the sample phones, which consists of bill of materials, manufacturing cost and royalty, Chinese domestic value added embedded in the MIX 2 is 15.4% and 16.7% in the R11s. The teardown analysis reveals that no indigenous Chinese firms are involved in the manufacture of the printed circuit board assembly, which explains the relatively low Chinese domestic value added. Using retail price to measure total value added, we find that the domestic value added of the MIX 2 to be 41.7% while that of the R11s to be 45.3%. The cost of retail services and gross marginal profits contribute most to the increase, which implies that nurturing mobile phone brands has not only enabled the Chinese mobile phone industry to move up ladder of value chains, but also to improve domestic value added.JEL Classification Codes: L63, F23http://www.grips.ac.jp/list/jp/facultyinfo/xing_yuqing

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

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.http://www.grips.ac.jp/list/jp/facultyinfo/xing_yuqing

Feasibility study on the microeconomic impact of enforcement of competition policies on innovation: final report

Following seminal contributions from two of the giants of 20th century economics, Schumpeter and Arrow, the relationship between competition and innovation has long been hotly debated, but the general consensus is that competition, whether for the market or in the market, is an important stimulus to innovation. This provides an important additional justification for competition policy, beyond the static purely price-based perspective. Remarkably however, we know relatively little about how specific competition policy interventions have impacted on firms’ innovation activities. So whilst the impact evaluation literature has made important strides in recent decades in assessing the static gains which have been driven by anti-trust and merger control, there have only been very few studies evaluating the impacts of individual policy decisions in this area. The main objective of this study is to explore whether, and how far, such impact evaluation exercises are feasible for competition and innovation. For this reason DG COMP commissioned a team of academics led by Peter Ormosi at the Centre for Competition Policy, University of East Anglia, to review the existing literature, and to propose a rigorous analytical and methodological framework which can be used to evaluate cases. As an illustration of this framework in action, the study provides a pilot evaluation of the Seagate/Samsung and Western Digital/Hitachi mergers. The findings of this case study prove to be interesting in their own right – shedding some new light on these important mergers. But far more important for present purposes, it establishes that the methodology is viable, albeit with important lessons to be learnt. The objective of this study was to offer a detailed literature review, develop a methodological framework, collect data on three different areas (R&D spending, patents, and product characteristics), and analyse it. Our task was to identify what is feasible, what we can learn in terms of the applied methodology, and also to provide preliminary results on how innovation was affected by the 2012 consolidation of the HDD market

The distribution of value in the mobile phone supply chain

The supply chains of the mobile phone industry span national and firm boundaries. To analyze how value is distributed among the participants, a framework based on theories of firm strategy is applied, and a novel methodology is used to measure value capture in three phone models introduced from 2004 to 2008. The research shows that carriers capture the greatest value (in terms of gross profit) from each handset, followed closely by handset makers, with suppliers a distant third. However, the situation is reversed in terms of operating profit. Carriers shoulder the burden of network installation, maintenance, and upgrading, which absorbs much of the value from their subscription fees. Handset maker nationality, which may also influence supplier choice, is a key determinant of the geographic distribution of value capture. The results are also used to estimate the relationship of handset subsidies to carrier profits, which has been an issue of concern for antitrust authorities in several countries. The analysis shows how the framework can be used to calculate how much service charges might be inflated to cover the subsidies. © 2011 Elsevier Ltd. All rights reserved

Intellectual property strategy : analysis of the flash memory industry

Thesis (S.M.M.O.T.)--Massachusetts Institute of Technology, Sloan School of Management, Management of Technology Program, 2006.Page 150 blank.Includes bibliographical references (o, 120-121).This thesis studies the intellectual property strategy of companies in the flash memory industry, with special emphasis on technology and the development of nitride-based flash, a new and emerging type of memory technology. First, general perspectives and frameworks for licensing of patents and know-how are explored. Then, the participants in the flash memory industry are mapped to a product value chain, which is in turn mapped to an intellectual property value chain. We use a patent database analysis software IPVision in order to examine the patent portfolios of some of the memory chip companies. Analysis of the patent positions allows us to draw conclusions about the direction of technology development.by Tomoko H. Ogura.S.M.M.O.T

Explaining variations in semiconductor catch-up strategies in China, Korea, Malaysia and Taiwan

Presented at the GLOBELICS 6th International Conference 2008 22-24 September, Mexico City, Mexico

Evaluation of the colossal electroresistance (CER) effect and its application in the non-volatile Resistive Random Access Memory (RRAM)

Thesis (M. Eng.)--Massachusetts Institute of Technology, Dept. of Materials Science and Engineering, 2009.Cataloged from PDF version of thesis.Includes bibliographical references (p. 79-81).Flash memory, the current leading technology for non-volatile memory (NVM), is projected by many to run obsolete in the face of future miniaturization trend in the semiconductor devices due to some of its technical limitations. Several different technologies have been developed in attempt for replacing Flash memory as the most dominant NVM technology; none of which seems to indicate significant success at the moment. Among these technologies is RRAM (Resistive Random Access Memory), a novel type of memory technology which has only recently emerged to join the race. The underlying principle of an RRAM device is based on the colossal electroresistance (CER) effect, i.e. the resistance switching behavior upon application of voltage of varying polarity and/or magnitude. This thesis aims to investigate the CER effect and how it can be designed to be a non-volatile memory as well as other novel application, e.g. memristor. The various technical aspects pertaining to this phenomenon, including the materials and the physical basis, are explored and analyzed. As a complementary to that, the market potential of the RRAM technology is also assessed. This includes the market study of memory industry, the current intellectual property (IP) landscape and some of the relevant business strategies. The production strategy (i.e. the production cost, initial investment, and pricing strategy) is then derived from the technical and market analysis evaluated earlier and with using some reasonable assumptions.by Aulia Tegar Wicaksono.M.Eng

A study of complexity, innovation and variety; the photographic camera example

This thesis is an exploratory research concerned with the investigation and identification of complex systems and their innovation life patterns. There is evidence in the literature to suggest the existence of complex systems, which differentiate themselves not only by organisational structure, but also by the way, they innovate. Complex systems seem to display a nested hierarchical formation of technological elements and the clustering of those technological elements in a synergistic manner in order to offer an enhanced service. Another distinct element of complex systems is the dependency that some particular elements in the hierarchy seem to display. This dependency of the elements in the nested hierarchy means that changes (innovation) made in one of the elements of the hierarchy might result in changes in other elements or the whole hierarchy. These characteristics not only differentiate complex from simple systems but are also the main reason why complex systems innovate in a different manner from simple systems (classical view of innovation). There is an important gap in the study of innovation in complex systems in the literature. Firstly, if in fact complex systems innovate differently from simple systems there is no evidence of a model that could clearly identify and separate complex from simple systems. Secondly, previous research on complex systems theory and innovation has studied complexity as a whole; however, the dependency between the elements is the crucial factor that hinders complex systems from innovating according to the classical view of innovation. There is no indication in the literature of a model that could clearly identify those distinct elements within the complex systems hierarchy that display the dependency. If there was a model that could identify the risk elements in the systems that carry the dependency, marketing/design managers could develop more efficient innovation strategies without putting at risk the performance of some elements of the systems or the whole product. This research proposes a model that could help to identify the particular elements that display that dependency and the possible effect that it could have in the whole hierarchy. This model is also used as a tool to identify and separate complex systems from simple systems. This research uses cameras in an example study to test the models suggested by this research. Previous research on complexity has been done in an industrial market; however, there is no empirical evidence in the literature of a model that could help the investigation of the evolution of complex systems in a commercial market. Products in a commercial market are subject to heterogeneity of demand, speed of innovation, and sophistication of needs. A model that could map the innovation pattern of commercial complex systems could help marketing and design companies with innovation strategies and decisions. In this research, this model was applied to the camera example and, in fact, cameras gave high indications and displayed clear evidence that could lead to the classification of cameras as complex systems. Cameras display evidence both of dependency between the elements and of a nested hierarchical formation, which are the elements that separate complex from simple systems. Subsequent to the finding of the evidences that support cameras as complex systems, this research investigates the innovation pattern of cameras from 1955 to 2011, and compares this innovation pattern to the classical view of both innovation and complex systems. As indicated in the literature, even though cameras have some elements common to the classical view of innovation at the beginning of the innovation life cycle, they display a rather different pattern closer to that offered by complex systems innovation. By applying this model, this research not only seems to help the classification and distinguishing complex from simple systems but also studies the complex system as a whole, and the identification of the elements that display dependency and could put any innovation activity at risk. This model also offers the possibility of studying innovation and clearly identifying to what extent and in which manner complex systems innovate differently from simple systems

Abstraction Fashion: Seeing and Making Network Abstractions and Computational Fashions

Human life today is enmeshed with network organisms. What we value, the ways we talk, and the subject matter we pay attention to are all dependent on and depended upon by the networks that dominate our imagination. The internet, private social platforms, and the virtual and physical supply chains that create the hardware, software, and memetic abstractions with which we think are all examples of network organisms. Each has found a viability mechanism that permits it to survive and thrive in the present moment. Each viability mechanism creates its own unique incentives for self-perpetuation, which drive the outward appearances with which we are familiar. These incentives manifest as product forms, interface abstractions, and socially optimized beliefs and identities. To grapple with what drives the abstractions these network organisms output, this dissertation builds a worldview for seeing and making with computational networks. Computing machines are composed of abstractions, simulate abstractions, and project their abstractions onto the world. Creating in this medium requires resources that can be acquired through attention manipulation and fashion performance. The text culminates in an appendix documenting ewaste club, an art research-creation project that combines wearable cameras, supply chain inspired fashion, and disposable computers. Through a mixture of practical projects, historical analysis, and technical explanation, this dissertation proposes several new concepts linking fashion, the arts, and computation to making in the time of networks