Xiaomi is one the earliest to tap China’s independent design house (IDH) and original design manufacturing (ODM) firms. (Photo : Reuters)
Recently, China's independent design house (IDH) and original design manufacturing (ODM) firms have seen success in their overseas ventures, according to a China Business News report, thanks to the fast expansion of the operations of hidden supply chain players backing them in their production.
Majority of these IDH or ODM enterprises--around 90 percent--are publicly listed, Deng Anming, assistant to the president at Wingtech Communication, said. This comes as the emergence of the Internet model has catalyzed the upstream smartphone design industry's growth.
Wang Yanhui, Mobile China Alliance's secretary-general, stated that the popularity of the said model has become a platform by which ODM firms have been transformed to vertical integration in the whole industry chain. This has helped the country become the global leader of handset production.
The report said that since last year, at least eight IDH or ODM firm-made handsets have inked deals in the capital market. For instance, Join-in (Holding) unveiled its acquisition plan on April 16, eyeing for a 51-percent stake in Wingtech for 11.87 yuan per share.
Deng remarked that the Internet model has created significant impact, opening many other opportunities. With the model, IDHs can also follow up with software and application services, apart from providing PCBA and whole handsets.
The model was first ushered in when Xiaomi cooperated with Wingtech to decrease the price of average retail handsets. It was proved to work well as almost every top-notch smartphone is using an IDH.
Besides supporting Xiaomi and Huawei, Wingtech has also been giving support in terms of design and technology to India's largest domestic handset, Micromax.
Deng noted that like ODM firms, major IDH enterprises can now handle design-to-production process, with brand owners only needing to turn their attention to the handset's marketing and sales.
Additionally, Wang said that with the vertical integration of IDHs, not only the hardware-software integration can be possible, but also that of the aspects of design, research and development, and supply chain management.
