Independent Design Houses in China – IDH sector in the global market

Independent Design Houses in China - the IDH sector in the global marketDec. 15 – China’s independent design house (IDH) sector has become a vital part of today’s product design and development process in China’s electronics industry. This vigorous service sector with features of small and mid-sized companies that produce reference designs, evaluation boards and custom design-related services for OEMs, ODMs and EMS companies/ that has been driving the market growth.

Shanghai’s Wingtech Communications, which is typical example of Independent Design House in China, Wingtech started out in 2006 as one of China’s many independent design houses, or IDHs in industry lingo. In 2008, Wingtech made the jump to manufacturing and opened its own factory. It became an Original Design Manufacturer or ODM. Today Wingtech counts among its customers many of the world’s fastest-growing smartphone brands; 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. There is a global boom in low-cost smartphones everywhere from India to Brazil. Today 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.

These IDHs were behind the initial rise of China’s smartphone industry, as they helped hundreds of start-ups with little mobile experience build their own smartphones in a matter of months, which meant it offered customers a line of services from product design to manufacturing and even some aftersales service. Also it has helped Chinese brands narrow the technological gap with global manufacturers while still competing on price. Now China boasts a growing number of strong brands that can compete globally, putting new pressure on global smartphone makers like Samsung Electronics.

The core competitiveness is China IDHs research and design capability. Local IDH agrees to make a phone for a client only if it thinks the gadget will become a big seller, and to develop a new smartphone model in as little as six months. Nowadays Chinese mobile brands go overseas though with some challenges. Wingtech-contracted phones sold close to 50 million units last year, and its factory has a capacity of 2.5 million phones a month, and another leading Chinese handset maker Huawei sets up sale offices in Europe and around the world which is upbeat signal for IDH sector in China. Independent Design Houses sector in China and China’s smartphone industry is entering a terrific era. For China Local Independent Design House (IDH) Report 2015-2017 is available upon request, please contact with DCCC, or email to: info@dccchina.org

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