As Ben Joffe shows in his presentation below, prices of quite a number of consumer products have come down very rapidly. The XiaoMi Yi camera for example equals or bests the GoPro Hero on virtually all specs, while selling for just $65. Mind that the prices listed in the graph are China retail prices, in the US it sells on Amazon for $97.
Another important aspect is the increasing speed at which products come out. As Chris Anderson, CEO of 3D Robotics, is quoted: “Before you had six years, now you have six months“.
Exciting and scary at the same time, China’s supply chain is clearly still unparalleled, especially for anything custom: housings, LCD displays, batteries, PCB’s, packaging…
The first samples and production batches of custom parts often have issues. To avoid being crippled by shipping costs and delays, final assembly needs to be done close to the factories making the components. And when you’re having most of the parts made and assembled in China, nothing makes more sense than having the design done there as well.
The trick of course is to harness the power of this supply chain beast to reap the benefits while avoiding IP infringements and other China manufacturing pitfalls.