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WIth Modi-ji's brilliant leadership and 'Make in India' initiative, I have no doubt that India will become the greatest manufacturing power by 2020!
A Peek Into the Home of China’s Cheap-Phone Revolution - China Real Time Report - WSJ
A Peek Into the Home of China’s Cheap-Phone Revolution
10:03 am HKT
Sep 8, 2015
Economy & Business
Wingtech is a Shanghai-based smartphone design and manufacturing contractor. Its clients include Xiaomi, Huawei and Micromax.
Wingtech
The sound of tapping computer keys fills the office, as hundreds of young engineers in low-walled cubicles examine chip circuitry on their computer screens and sketch out design concepts for new smartphones.
This is where the world’s cheap phones are born.
The facility is owned by Shanghai’s Wingtech Communications, which counts among its customers many of the world’s fastest-growing smartphone brands, including China’s Xiaomi, Huawei and Meizu and India’s Micromax.
China’s smartphone market has been transformed over the past few years. The market used to be filled with unreliable knock-offs – called shanzhai, or “mountain fortress,” devices in Chinese. Now China boasts a growing number of strong brands that can compete globally, putting new pressure on global smartphone makers like Samsung Electronics. Meanwhile, many of the shanzhai makers have closed up shop.
A Wingtech engineer tests the audio quality of a smartphone in a sound-proof room. A dummy assists.
Eva Dou/The Wall Street Journal
One reason behind this shift is the maturation of what has been called the red supply chain, a cheaper smartphone supply network that involves more Chinese component makers and manufacturers than the traditional electronics supply chain. The improving quality of these suppliers — such as Wingtech, Shanghai Huaqin Telecom Technology and Longcheer Holdings — has helped Chinese brands narrow the technological gap with global manufacturers while still competing on price.
While global smartphone brands like Apple also make most of their phones in factories in China, they rely more often on Taiwanese contractors like Foxconn and more international component suppliers.
The rise of the red supply chain is one reason behind a global boom in cheap smartphones everywhere from India to Brazil. Follow the supply chains of cheap phones upstream from anywhere in the world, and many of them lead back to the same origins in China.
Wingtech started out in 2006 as one of China’s many independent design houses, or IDHs in industry lingo, which sold off-the-shelf handset designs that customers could sell under their own brands. These IDHs were behind the initial rise of China’s smartphone industry, as they helped hundreds of startups with little mobile experience build their own smartphones in a matter of months. Quality issues abounded in these early Chinese smartphones, and many were knock-offs or no-name brands.
In 2008, Wingtech made the jump to manufacturing and opened its own factory. It became an original design manufacturer or ODM, which meant it offered customers a line of services from product design to manufacturing and even some aftersales service. Since then, it has winnowed down its customers from more than a hundred to just a handful of larger Chinese and Indian brands. It says its biggest clients are Xiaomi, which uses Wingtech as its contractor for its lower-cost Redmi phone line, and another leading Chinese handset maker Huawei.
A Wingtech engineer stands inside the companys signal-testing room. Smartphones are put inside the tunnel to test their signal strength, with foam lining the wall to prevent interference.
Eva Dou/The Wall Street Journal
“We’re not just a contract manufacturer like Foxconn,” said Deng Anming, Wingtech strategic manager. “Our core competitiveness is our research and design capability.”
A Meizu spokeswoman said the supplier was a supportive partner that offered competitive prices. Xiaomi, Huawei and Lenovo declined to comment. Micromax didn’t respond to a request for comment.
Wingtech these days bets on blockbusters. The market for smartphone contract manufacturing is fiercely competitive, with contractors earning tiny margins. To boot, the Chinese smartphone market has reached saturation and begun shrinking after years of breakneck growth.
A product that bombs could easily mean losses. Mr. Deng said the company agrees to make a phone for a client only if it thinks the gadget will become a big seller, as the large scale lets Wingtech negotiate down component costs and expand its profit margin. Wingtech had a net profit of around $14.6 million and a 2.2% net margin in 2014, according to a stock exchange filing by its parent company.
China Real Time recently got a rare tour of Wingtech’s Shanghai research center and factory in the nearby industrial city of Jiaxing. Wingtech didn’t permit photos in some areas due to client confidentiality.
Design:
Like most contract manufacturers, Wingtech does a lot more than just manufacture devices. It works with clients to design products, providing lower costs due to its large scale than what its clients could achieve by doing it all in-house.
Wingtech moved into a new headquarters in Shanghai in February, where it has about 600 employees. The white building has open floors with hundreds of young engineers sitting at computers, each working on a specific step in smartphone development.
Much of the work takes place out of view. Closed doors off the main room house the secret projects of major clients such as Xiaomi, Huawei, Lenovo, Meizu and Micromax.
Chinese contractors like Wingtech can help clients develop a new smartphone model in as little as six months.
A chart with patterns made up of minute lines hangs on the wall of Wingtech. The diagram is used to check smartphone cameras’ ability to capture small details.
Eva Dou/The Wall Street Journal
Testing:
Once a design is set, then comes reliability testing. Think “American Ninja Warrior” for phones. Each smartphone runs a gantlet of tests at Wingtech’s $2 million testing center before it is deemed ready for the assembly line.
Phones get plugged into a computer that opens and closes each app over and over for hours to check for glitches. The phones’ screens blink nonstop as if possessed. Afterward, the phones get an eye exam: a series of optical illusion-like diagrams and color charts to test their cameras’ focus and color capture. There’s a drop test, a heat test, a cold test, a pressure test, a humidity test. The phones are stuck inside an MRI-looking device to gauge signal strength, and strapped to a mannequin’s head to see whether the user’s hand or head will inhibit sound.
Manufacturing:
Around an hour from the Shanghai R&D center is Wingtech’s factory. Like the typical Chinese electronics factory, it is in an industrial park in the outskirts of the city and is a self-contained minitown for its employees. The 9,000 workers live in dorms on campus, and the company has a movie theater, Internet cafe and other recreational facilities to help retain workers. High turnover rate is a perennial problem for China’s electronics factories, with young workers frequently quitting due to the monotonous work.
Wingtech makes its own circuit boards and some other parts like the smartphone shells onsite. These component manufacturing processes have long been highly automated across the industry. Empty circuit boards glide down a long tunnel, where machines filled with reels of tape containing tiny components place them in the right position on each circuit board. A robot checks that everything is aligned before an oven solders everything in place. In another – much louder – building, heavy-duty machines cut and mold metal and plastic.
Then comes the final assembly, by far the most labor-intensive step. Workers go through a wind tunnel to remove debris before they can enter the assembly floor, and they wear hats and shoe covers. Different colored hats separate regular assembly workers from team leaders and higher officials.
The final assembly of smartphones is still done mostly by hand, although Wingtech and others like Foxconn have been working to automate more parts of the process. The difficulty lies in the short product life cycles of smartphones, and the more advanced movements needed to put the pieces together, which makes a fully automated assembly line prohibitively expensive right now.
But there are small advances. For instance, Wingtech has added this year a machine on assembly lines to test the audio jack of each phone. Before, a worker had to listen to each one manually.
From there, the devices are boxed up and shipped off. Wingtech-contracted phones sold close to 50 million units last year, Mr. Deng said, although only some of those were manufactured in-house. Wingtech’s factory has a capacity of 2.5 million phones a month, and it outsources production to other factories if there are excess orders.
Chinese listed real estate company Join In (Holding) Co. acquired 51% of Wingtech last month.
Although the Chinese smartphone industry faces challenges this year such as a saturated market, Mr. Deng says he is upbeat as more Chinese mobile brands go overseas.
“China’s smartphone industry is entering a golden age,” he said.
–Eva Dou. Follow her on Twitter @evadou.
Sign up for CRT’s daily newsletter to get the latest headlines by email.
For the latest news and analysis, follow @ChinaRealTime
A Peek Into the Home of China’s Cheap-Phone Revolution - China Real Time Report - WSJ
A Peek Into the Home of China’s Cheap-Phone Revolution
10:03 am HKT
Sep 8, 2015
Economy & Business
Wingtech is a Shanghai-based smartphone design and manufacturing contractor. Its clients include Xiaomi, Huawei and Micromax.
Wingtech
The sound of tapping computer keys fills the office, as hundreds of young engineers in low-walled cubicles examine chip circuitry on their computer screens and sketch out design concepts for new smartphones.
This is where the world’s cheap phones are born.
The facility is owned by Shanghai’s Wingtech Communications, which counts among its customers many of the world’s fastest-growing smartphone brands, including China’s Xiaomi, Huawei and Meizu and India’s Micromax.
China’s smartphone market has been transformed over the past few years. The market used to be filled with unreliable knock-offs – called shanzhai, or “mountain fortress,” devices in Chinese. Now China boasts a growing number of strong brands that can compete globally, putting new pressure on global smartphone makers like Samsung Electronics. Meanwhile, many of the shanzhai makers have closed up shop.
A Wingtech engineer tests the audio quality of a smartphone in a sound-proof room. A dummy assists.
Eva Dou/The Wall Street Journal
One reason behind this shift is the maturation of what has been called the red supply chain, a cheaper smartphone supply network that involves more Chinese component makers and manufacturers than the traditional electronics supply chain. The improving quality of these suppliers — such as Wingtech, Shanghai Huaqin Telecom Technology and Longcheer Holdings — has helped Chinese brands narrow the technological gap with global manufacturers while still competing on price.
While global smartphone brands like Apple also make most of their phones in factories in China, they rely more often on Taiwanese contractors like Foxconn and more international component suppliers.
The rise of the red supply chain is one reason behind a global boom in cheap smartphones everywhere from India to Brazil. Follow the supply chains of cheap phones upstream from anywhere in the world, and many of them lead back to the same origins in China.
Wingtech started out in 2006 as one of China’s many independent design houses, or IDHs in industry lingo, which sold off-the-shelf handset designs that customers could sell under their own brands. These IDHs were behind the initial rise of China’s smartphone industry, as they helped hundreds of startups with little mobile experience build their own smartphones in a matter of months. Quality issues abounded in these early Chinese smartphones, and many were knock-offs or no-name brands.
In 2008, Wingtech made the jump to manufacturing and opened its own factory. It became an original design manufacturer or ODM, which meant it offered customers a line of services from product design to manufacturing and even some aftersales service. Since then, it has winnowed down its customers from more than a hundred to just a handful of larger Chinese and Indian brands. It says its biggest clients are Xiaomi, which uses Wingtech as its contractor for its lower-cost Redmi phone line, and another leading Chinese handset maker Huawei.
A Wingtech engineer stands inside the companys signal-testing room. Smartphones are put inside the tunnel to test their signal strength, with foam lining the wall to prevent interference.
Eva Dou/The Wall Street Journal
“We’re not just a contract manufacturer like Foxconn,” said Deng Anming, Wingtech strategic manager. “Our core competitiveness is our research and design capability.”
A Meizu spokeswoman said the supplier was a supportive partner that offered competitive prices. Xiaomi, Huawei and Lenovo declined to comment. Micromax didn’t respond to a request for comment.
Wingtech these days bets on blockbusters. The market for smartphone contract manufacturing is fiercely competitive, with contractors earning tiny margins. To boot, the Chinese smartphone market has reached saturation and begun shrinking after years of breakneck growth.
A product that bombs could easily mean losses. Mr. Deng said the company agrees to make a phone for a client only if it thinks the gadget will become a big seller, as the large scale lets Wingtech negotiate down component costs and expand its profit margin. Wingtech had a net profit of around $14.6 million and a 2.2% net margin in 2014, according to a stock exchange filing by its parent company.
China Real Time recently got a rare tour of Wingtech’s Shanghai research center and factory in the nearby industrial city of Jiaxing. Wingtech didn’t permit photos in some areas due to client confidentiality.
Design:
Like most contract manufacturers, Wingtech does a lot more than just manufacture devices. It works with clients to design products, providing lower costs due to its large scale than what its clients could achieve by doing it all in-house.
Wingtech moved into a new headquarters in Shanghai in February, where it has about 600 employees. The white building has open floors with hundreds of young engineers sitting at computers, each working on a specific step in smartphone development.
Much of the work takes place out of view. Closed doors off the main room house the secret projects of major clients such as Xiaomi, Huawei, Lenovo, Meizu and Micromax.
Chinese contractors like Wingtech can help clients develop a new smartphone model in as little as six months.
A chart with patterns made up of minute lines hangs on the wall of Wingtech. The diagram is used to check smartphone cameras’ ability to capture small details.
Eva Dou/The Wall Street Journal
Testing:
Once a design is set, then comes reliability testing. Think “American Ninja Warrior” for phones. Each smartphone runs a gantlet of tests at Wingtech’s $2 million testing center before it is deemed ready for the assembly line.
Phones get plugged into a computer that opens and closes each app over and over for hours to check for glitches. The phones’ screens blink nonstop as if possessed. Afterward, the phones get an eye exam: a series of optical illusion-like diagrams and color charts to test their cameras’ focus and color capture. There’s a drop test, a heat test, a cold test, a pressure test, a humidity test. The phones are stuck inside an MRI-looking device to gauge signal strength, and strapped to a mannequin’s head to see whether the user’s hand or head will inhibit sound.
Manufacturing:
Around an hour from the Shanghai R&D center is Wingtech’s factory. Like the typical Chinese electronics factory, it is in an industrial park in the outskirts of the city and is a self-contained minitown for its employees. The 9,000 workers live in dorms on campus, and the company has a movie theater, Internet cafe and other recreational facilities to help retain workers. High turnover rate is a perennial problem for China’s electronics factories, with young workers frequently quitting due to the monotonous work.
Wingtech makes its own circuit boards and some other parts like the smartphone shells onsite. These component manufacturing processes have long been highly automated across the industry. Empty circuit boards glide down a long tunnel, where machines filled with reels of tape containing tiny components place them in the right position on each circuit board. A robot checks that everything is aligned before an oven solders everything in place. In another – much louder – building, heavy-duty machines cut and mold metal and plastic.
Then comes the final assembly, by far the most labor-intensive step. Workers go through a wind tunnel to remove debris before they can enter the assembly floor, and they wear hats and shoe covers. Different colored hats separate regular assembly workers from team leaders and higher officials.
The final assembly of smartphones is still done mostly by hand, although Wingtech and others like Foxconn have been working to automate more parts of the process. The difficulty lies in the short product life cycles of smartphones, and the more advanced movements needed to put the pieces together, which makes a fully automated assembly line prohibitively expensive right now.
But there are small advances. For instance, Wingtech has added this year a machine on assembly lines to test the audio jack of each phone. Before, a worker had to listen to each one manually.
From there, the devices are boxed up and shipped off. Wingtech-contracted phones sold close to 50 million units last year, Mr. Deng said, although only some of those were manufactured in-house. Wingtech’s factory has a capacity of 2.5 million phones a month, and it outsources production to other factories if there are excess orders.
Chinese listed real estate company Join In (Holding) Co. acquired 51% of Wingtech last month.
Although the Chinese smartphone industry faces challenges this year such as a saturated market, Mr. Deng says he is upbeat as more Chinese mobile brands go overseas.
“China’s smartphone industry is entering a golden age,” he said.
–Eva Dou. Follow her on Twitter @evadou.
Sign up for CRT’s daily newsletter to get the latest headlines by email.
For the latest news and analysis, follow @ChinaRealTime
