From this and other accounts, it is clear that a lot of the low cost in China is due to that fact that transaction costs (the cost of writing contracts, lawyers, specifications) are reduced by replacing formal contracts by interpersonal relations[0]. So if someone screws you[1], it will hurt their relationship with you and their reputation.
Of course there are other considerations like cheap labour and the ability to rip-off Western IP (though I don't think those goods make it to the West). But these can't explain why China in particular is so dominant in manufacturing.
[0] I'm told that the term "guanxi" has two meanings. First as a generic term for "connection" or "relationship" and second as a proper noun for the way people indirectly bribe government officials. Here only the first meaning would apply since I'm talking about B2B relationships. And since it's a generic term, there is no reason to use the Chinese word.
[1] Or screws you more than is considered fair game.
Well from the point of view of China the nation, these aren't externalized: Chinese people will have to pay this cost. But you're right that this contributes to lower costs. I still the main reason is the first one I gave though.
I would like to add that the economies of scale, and the fact that huge amount of suppliers are all within 300KM of range. It is just so much easier to find the right people, the right parts there.
A few years ago I lived in Shanghai, and it was always fun to stop by the black markets to check out the fake iPhones and Apple gadgets that they were selling.
It was amazing how close they were to copying a real iPhone in terms of the hardware design, but it was always funny to see them run a version of Android. They were selling them for $10 a pop as well. It's incredible to check out these electronic markets in China and see the effort that goes into these fakes.
Yeah, that's the most incredible part for me: I just can't understand the economics that allow such low prices. Every time I read about it, I get strong Neuromancer vibes.
I don't know if this improves your view of the world or not, but filling punching bags with used clothes (or fabric scraps) is actually common practice.
The amazing thing is the customer, who had slowly developed a set of acceptability criteria for desktop computing (basic stuff like "no spyware") and got it all reset to zero for mobile computing, just like that. That was amazing. And scary.
This is the IT story of the century, but it's not often talked about in those terms - I found it horrifying and demoralizing to watch. But perhaps it's not the last time we'll have some sort of discontinuous lurch - perhaps it's a good thing that such resetting of expectations is possible. Perhaps the shoe will move to the other foot with the next wave...
Poke around alibaba and you'll find several companies selling 4-5" touch screens with decent resolutions for around $2-3 a piece for order of 1000+ units. If you're on the ground and speak the language you can certainly get a much better deal than that.
The chips, resistors, capacitors etc are all mostly functionally equivalent. The transistors, regulators ICs etc will all do what they're spec'd to do, at a basic level.
Where it gets dicey are fringe cases, and on poorly controlled specs. Care about the temperature drift of your resistor, the slew rate of your op-amp, the beta of that BJT, or the mismatched LED strings in the COB?
Better test it to make sure it'll work for you, because 90% of the time, it's bullshit.
For common parts, it's easy to set up a new line, running off good parts -- the 555 timers and lm317s do enough volume for a new line to make sense. These chips are usually better characterized. If it's a small volume part, or something old as dirt, it's usually pulls, a new part in an old case, or just a normal part remarked.
Discovering aliexpress was pretty awesome when I got started working with electronics hardware. Easily 1/5th the price of buying from an American store, in some cases as low as 1/10th the price. I've spent $500+ on stuff from aliexpress that would have been over $3k from a place like Adafruit, and I've had very few garbage pieces (though admittedly haven't used/tested a lot of it).
Adafruit buys most of their jellybean parts off of Alibaba and resells it. You are paying extra for them to stock this stuff in the US (NYC in particular). Real distributors like Digikey and Mouser have better deals because you can get name-brand stuff for the same price as the Alibaba stuff from Adafruit. By jellybean parts, I am mainly talking about pin headers and such. Most of the dev boards Adafruit offers are unique to them.
I see it as I'm also paying for their time and expertise in selling me a thing that won't malfunction in ways which might take me hours to troubleshoot. I also like what they do and their contributions to the community, and me buying a esp8366 through them with good-quality docs, tutorials, and working examples is worth the extra few dollars for my personal enjoyment of my hobby.
I also can't feel good supporting fakes / copies and China's mistreatment of the environment for profit.
I agree about the Adafruit, etc. buying jellybean parts from Alibaba, but Digikey's prices being close? No. At least not in smaller volume. I can buy Arduinos on AliExpress (qty 10 or so) for less than I could purchase even just the AVR chips alone.
If a part is critical, I'll buy a known, characterized, device made by a reputable manufacturer from a reputable supplier. (I don't expect that an Omron 50A relay on Alibaba for $5 is real) But for generic LEDs, non-critical switches & connectors, it's Alibaba/Aliexpress all the way.
Sadly, a lot of the Aliexpress stuff is so cheap because it's unlicensed/knockoffs. It'll work, but in a lot of cases, it's the hardware equivalent of pirating software. :/
As someone who finds the American copyright and patent system unbelievably fucked up, I really have no qualms with buying knock-off modules/boards. It's not like any of them are especially novel or something any competent EE couldn't conceptualize with relatively little effort.
Digikey and Mouser are cheaper than Adafruit (For example, http://www.digikey.com/product-detail/en/texas-instruments/S... vs https://www.adafruit.com/products/450). Adafruit's advantage (and the reason they are in business) is that they specifically market to hobbyists, selling stuff that's easy to use and giving you instructions on how to use it. And some of their stuff is straight from Aliexpress (https://www.adafruit.com/product/1150). As a side note, I prefer to buy Chinese components from eBay. Some of the time, you can find high quality new-old-stock on there too.
It's great for obscure cables and such too. My wife has a Nexus 6P, so I got her a shiny new USB type-C charging mount for her car. I still wanted to be able to charge my micro-usb phone in it though, so I wanted a USB-C female to micro-usb adapter. You'd think those would be available, but they're really not, because 99.9% of people who want such an adapter need it to go the other way. Found them on aliexpress though, for about 5% of what I probably would've been willing to pay. (I bought three, in case any were defective or got lost, but they all work great.)
I'm sure that you got lucky. My first experience with them was terrible. I ordered a phone (it was a dual-SIM android device) which wouldn't work for either voice calls or text messages. Tried SIM cards from different carriers, but nothing would work. You could connect it to the WiFi, though. Reporting the matter to AliExpress was terrible, those guys would insist that they're concerned, would look into it, but nothing happened.
More complex electronics like phones is where I'd draw the line.
I've ordered things like a dirt cheap soldering iron, a multimeter, a bluetooth mini keyboard for controlling the laptop when watching TV, USB charging cables, PCIe cables, LED strips, flawless, high quality knockoff sunglasses, etc and never had any issues. If you sort by most orders you normally filter out the worst of the crap.
AliExpress is similar to Ebay. You're not dealing with AliExpress that much, you're buying from many different sellers. As such, investigate!
If you buy something more expensive, look for feedback from others. Don't assume it'll be ok. It might be something that only works for China.
I have bought loads from AliExpress. Pretty much comparable experience to a cheap store. Meaning: quality is sometimes poor, but similar experience to going to a shop. Most of the sellers are very concerned with their star rating btw.
I suspect that AliExpress helps sellers manipulate ratings, else the sellers wouldn't turn a deaf ear to any queries.
Moreover, I'm not even sure how does the rating system on AliExpress work. I wasn't even given an option to rate the seller. The official support is terrible; they'd act as if they're very concerned but they wouldn't do anything even if the seller doesn't respond to any of your messages.
As others have said, I'd never buy anything expensive from AliExpress. Maybe like 30-40 dollars max. Especially if it's something as commonly faked as a phone.
I have certainly gotten a few cables and other plastic/rubber items that stank strongly, but after a day or two outdoors weren't noticeable. Likely the toxicity of the materials is a much larger problem in China, where these items are made. Unless you were considering ingesting them...
I order PCBs and ICs and other similar boards that all use lead based solder I am sure. So I wash my hands after working with it. A good practice even if you're buying stuff from American sellers because it's often the same parts.
Forget the west. In my experience there are a lot of legitimate products which you can buy in Shenzhen but not on Taobao. Recently my http://8-food.com/ co-founders and I visited Shenzhen from Kunming (much nicer weather) and found micro SD cards (256MB @ 3.5元 / 0.50USD) and micro SD card readers (0.5元 / 0.07USD). Although these were largely falsely marked as larger cards and intended for immoral mobile shops to dupe unsuspecting peasant customers, in reality they are great for low volume industrial data storage on physically modular components. Far cheaper and faster to integrate than a microcontroller! I would say that in our case, discovering the availability of USB lowball storage and validating this approach architecturally paid for the entire trip.
Unfortunately, eBay (in the US) is so inundated with these that you can have a very difficult time finding something that's actually 32GB (or whatever non-8GB capacity you want).
It's so bad you have to search for name brands to get the real stuff.
In this case, all of the fake cards were "name brands"
I think I got offered "Samsung", "Kingston" and "SanDisk" cards at roughly (but not exactly) the same pricing. Retail packaging was available at a small extra charge.
I personally buy highly-faked stuff like this from Amazon, and only consider "shipped from and sold by Amazon" stuff. If I ever have a problem, it's very easy to return, and I've never had a problem with their own stuff.
I bought one of those as a tourist in Suzhou ten years ago. Tried it in my SLR, worked fine... We laughed about it then but it taught me a lesson about trust.
I've actually purchased a few 12VDC RTC timers insanely cheap on Aliexpress with the intention of writing good documentation and reselling them at 10x markup into a niche market. Right now I'm checking them out to see that they maintain time well.
Even at that markup, I'll be the low-cost supplier, so maybe I should go for 15x. If it works out, I can think of a few other markets that have a need for something like this.
It's amazing: no way in hell could I even buy the raw parts, much less assemble and test full units, for what I can purchase these for.
Also interesting IMO is how some in China (not sure if it's mostly a HK thing or goes for mainland as well) are focusing on producing very high-quality stuff vs just the race to the bottom on price. One niche example that I've had very good luck with is Ghent Audio, which sells audiophile hobbyist gear: http://www.ghentaudio.com
Uhm... well, actually, some of those things are pretty cool though! Programmable LED name badge, mini drone, a dirt cheap smartwatch - I wouldn't necessarily call that crap or dreck.
I'm surprised they are so awed by the "Lightning/MicroUSB" cable but gloss over the (spring-loaded?) "USB-A/MicroUSB" plug of that selfie fan. The latter seems even more insane to me.
As for the fake SD cards, I'm kind of disappointed they didn't take the opportunity and produced the world's first 100TB SD card (patent pending). I'd be curious how many phones would be wrecked by such a card just because of the announced size.
There's probably some limitation based on address size that you can advertise, possibly the number of bits used to represent the size. Not sure on the exact spec.
The combo USB/MicroUSB thing has been around for a few years. I met the original designer at CES 2015. The lightning/MicroUSB thing is, I believe, new.
I don't have a breakdown for the ring, but from experience that's not much more than what it takes to keep the product flowing to people's doors in the US at modest volumes.
Anyone can buy these in any quantity. If you have a few hundred dollars and are interested in learning a little about business in China, it would be a fun exercise to import and sell something like these rings on Amazon.
I did this with phone cases like 6-7 years ago. I setup a website with Magento, took nice photos of all the cases (which I found out is kind of hard). And started running some Google and Facebook ads. I couldn't seem to make a profit that way (duh). In hindsight I should of pursued Amazon. I bought like 300 of them.. and 290 or so ended up in the trash.
It was really interesting to do though. Talking with the Sales people on Skype was kind of funny, I remember in one profile picture, the guy had a western outfit on (cowboy hat, bandana, the works). I think a lot of the Sales people did that kind of stuff to connect and seem more trustworthy with Americans.
I also picked up some single units of headphones and breathalyzers. All the headphones were garbage. Some of the breathalyzers actually seemed pretty nice, but they would be expensive to purchase in bulk, and it seemed legally risky.
The main cost/challenge I found was shipping. Air is quick and easy, but really expensive. Going by sea is cheap in comparison, but requires you operate at a bigger scale. There's a name for companies/people you can hire that will handle all the tricky parts of shipping by sea (I want to say Freight Agent but am not sure).
Heh, this mirrors my experience almost exactly, except with Nintendo Wii / DS accessories. The day Google banned R4 cards on Google Shopping was pretty much the day the entire business died. I still have a big box of stylii / cases / plastic Wii controller accessories that I haven't had the heart to throw away. It even moved house with me. :)
Completely unsustainable (the tiny margins I did make would have been completely wiped out if I was paying proper taxes) but did teach me a lot about business.
I think a better price comp would be eBay with "epacket" subsidized drop-shipping. Various straight-from-Asia doodads, in my experience, are vastly less expensive going that route.
amazon arguably isn't really fair comparison for < $1 items because amazon doesn't really sell anything for less than $6 anymore because (I assume) they don't want to lose money on prime shipping if that's the only item in the shipment. OTOH I don't know what a better comparison would be. ebay would probably just be a similar vendor shipping from china.
Amazon takes it's cut, then taxes (I'd guess that the HQB vendors don't really follow up on tax obligation), shipping... and of course the importer selling the rings on Amazon has to deal with stuff like customs, regulatory compliance (product safety), and of course wants a chunk of profit ;)
You screen print solder paste through the stencil, onto the board.
You then push the components onto the paste.
In the past you didn't have to be too precise, because surface tension of the solder as it flowed would pull it onto its pad, and would align the component correctly.
These repair stencils are also used for reballing BGA components.
A brand new BGA chip has hundreds of solder balls underneath, acting like the pins on a DIP package. When the component is reworked, the balls are damaged and need to be replaced. After removing the old balls, the stencil can be used to apply solder paste and new solder balls to the chip. Once the chip is reballed, it can be reflowed onto the board.
In reality I would expect all these components to be squeezed tightly together so I don't see how the large stencil plate would be of much use for rework. Presumably it would need to be cut up into small "per IC" units if someone wanted to put down solder paste on to a PCB which was already populated with other ICs.
Roughly, you align the stencil with the board, put paste on the stencil (so it only passes through to the pads), remove the stencil, place the chips and bake!
I have ordered lots of stuff from there and it has all turned up approximately in my mailbox 3 to 6 weeks later. I have generally ordered items which are less than the ~£15 customs threshold. More expensive items might be liable to VAT or other duties: https://www.gov.uk/goods-sent-from-abroad/overview
Other sites have begun started to ship from warehouses inside the EU to avoid customs issues, e.g. http://eud.dx.com/
If you have never seen these sites before then you should be warned that they even simple searches will return hundreds or thousands of results. You might spend a long time searching though the results for even something mundane like LED bike lights:
Aliexpress: https://www.aliexpress.com/wholesale?catId=0&initiative_id=S...
- Results have several suppliers offering 100 pieces at <£1 including delivery! I have ordered capacitors and resistors similar to these and they all turned up in the post several weeks later, just as I expected.
In my experience, most stuff over the £15 threshold slips through the net without being taxed. Chinese sellers seem to have a knack for it. Paying VAT seems to be the exception rather than the rule.
If you're getting started in electronics, I'd suggest buying mixed value kits of common passive components. They're really cheap and very handy to have around. If you work with SMD components, these sample books are a huge timesaver:
Aoyue and Yihua make very cheap and surprisingly usable soldering tools. You can get a perfectly acceptable temperature-controlled soldering iron or hot air gun for about £25. You might as well stock up on solder, flux and wick too.
Taobao is a bit of a crapshoot if you can't read Chinese, but it's where you'll find the really insane bargains and the sexy new chips. There are a variety of English-speaking agents who can buy stuff for you for a reasonable fee. Dangerous Prototypes have a useful forwarding service - have stuff delivered to their office and they'll send it on to you for $3 per parcel plus the cost of shipping.
Except that you have to stock the factories with a global supply chain, 95% of which is located in Guangdong province or other parts of south-east mainland China. This also means that, unless you are producing a consumer product, most of your market is likely to be located there as well.
Love it, and thats some amazing stuff to get in a relatively cheap box. Does anyone have any pictures from the markets, I'd imaging they're all very 'no photos' sorts of places but still.
And if you're outside of the UK and are looking for this via other means, it was (re)broadcast on 2016-06-25. Still looking for the other part, but I believe it was broadcast on the 11th (also in June) or a week earlier.
BBC Worldwide: I'd buy (a subscription to?) this series - do you want my money?
I wish I could pay for iplayer as well. I'm guessing it's complicated because of BBC being publicly-funded EDIT and international content licensing issues, but if they're producing the content and they own the IP, I'm not totally sure what the hold-up would be. I'd gladly pay $10-15 a month for an all-access pass to BBC content on streaming.
Somewhat astonishingly, I've only rarely had an issue photographing things in HQB. Some of the worst of the iPhone fakers and some of the folks selling unique designs do ask you not to take pictures, but almost everybody is totally cool with it.
I've got a bunch of low-quality pictures of the markets I've been meaning to push up to Flickr. I just need to go through and weed out the stuff that's horribly out of focus.
The one thing I've never gotten good pictures of is a pretty common sight on a Sunday afternoon: A couple of guys hanging out at their shop stall kitting out "iPhone6" boxes with new phones, earbuds, manuals, etc.
Having been to the markets myself, I'd say that they're not "no photos" places. The people in them are very camera shy and will typically insist you not capture any identifiable information like the store's name or number, but other than that pictures are fair game.
Cheap waterproofing, tamper proofing, 'packet' anonymization, and a means of tailoring a box to the custom size.
It needs the waterproofing in part because of the insane monsoon weather that blows into south China and will soak you in seconds and because a lot those packages get shuttled around in the back of open half-truck-half-motorcycles until they get to major distribution nodes.
It's 10 cents per square meter.
It's also partly cultural (everyone else does it this way) - and most sellers are small operations of a handful of people.
It provides seller protection for online purchases.
It doesn't make high value items look inviting.
The cardboard is frequently sourced or reused from whatever is lying around and cut to size so there's less need for filler when using 'standard' Amazon A1, B14, F3, etc style boxes.
It looks janky as hell, but it really works. It's a crude sort of composite structure.
Waterproofing is the obvious thing, but the tape makes the boxes much tougher. The tension of the tape makes the box much stiffer and more resistant to crush damage. The tape layer also smooths the surface and prevents the cardboard from snagging on package handling equipment. If the box is punctured, it's held together by the tape and is much less likely to rip open.
Many Chinese sellers use expanded polystyrene boxes for shipping fragile items, of the sort you'd see in a fish market. They're quite flimsy on their own, but become unbelievably tough when wrapped in tape.
I'm not 100% sure, but I've gotten several boxes from China packaged the same way, so I think it's to make them moisture/water resistant during shipping and to guarantee nothing comes out.
They used to ship them to countries with shitty mail services like almost all of ex-Soviet Republics. It's the only way items can be delivered undamaged there.
I think these cheap Chinese rip-off are bad for the electronics market and consumers. If your biggest concern is price when buying electronics, completely ignoring the fact of quality, care, and engineering you're contributing to decline of quality built electronics.
They don't do any of the hard engineering or go through meticulous testing and QA. They blatantly copy, and as such provide no innovation. Stop supporting this behavior, have some pride for the products you buy.
The device looks a lot like an Apple Watch, but the functionality is a little bit different. Sure, it has a pedometer and a sleep tracker. If you pair it with your phone, it can act as a bluetooth speaker and microphone. What sets this device apart is what you’ll find when you pop off the battery cover and remove the tiny little battery. There’s a SIM slot and an SD card slot. If you drop a SIM into the watch, you can make calls and surf the web. If you drop an SD card into the SD slot, you can use the phone’s camera to shoot grainy, low-resolution photos from your wrist. The vendor assured us that the watch would last about 3 days on standby.
So when Apple ships an iWatch with the ability to run standalone without an iPhone, remember "they blatantly copy, and as such provide no innovation"
I 100% agree with you, but I am still completely fascinated with articles that give us a glimpse into the underground wares of shenzhen.
I'd love to see some photos of these supposed great clones of iPhones and high end Androids. All the ones I've seen for sale on grey market sites look pretty fake.
Of course there are other considerations like cheap labour and the ability to rip-off Western IP (though I don't think those goods make it to the West). But these can't explain why China in particular is so dominant in manufacturing.
[0] I'm told that the term "guanxi" has two meanings. First as a generic term for "connection" or "relationship" and second as a proper noun for the way people indirectly bribe government officials. Here only the first meaning would apply since I'm talking about B2B relationships. And since it's a generic term, there is no reason to use the Chinese word.
[1] Or screws you more than is considered fair game.