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Value captured by China in the smartphone GVC– A tale of three smartphone handsets

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  • Xing, Yuqing
  • Huang, Shaopeng

Abstract

In this paper, we evaluate the distribution of value-added by country and by task for three mobile handsets assembled in China: Apple iPhone X, Xiaomi MIX 2 and OPPO R11s. We adopt two baselines: production costs and retail prices. In terms of the production costs, it is found that the shares of domestic value-added for the three handsets are 25.4%, 15.5% and 16.7% respectively. For the iPhone X, Chinese firms collectively captured more value--added than the first generation iPhone 3G and performed relatively sophisticated tasks beyond simply assembly. For MIX 2 and OPPO R11s, the teardown analyses further reveal that no indigenous Chinese firms are involved in the manufacturing of components mounted on printed circuit board assembly. In terms of retails prices, the shares of domestic value-added for Xiaomi MIX 2 and OPPO R11s are 41.7% and 45.3% respectively, higher than the corresponding figures for production costs, suggesting that developing indigenous brands before overcoming technology deficiency is an alternative strategy to move up the value ladder along the value chains.

Suggested Citation

  • Xing, Yuqing & Huang, Shaopeng, 2021. "Value captured by China in the smartphone GVC– A tale of three smartphone handsets," Structural Change and Economic Dynamics, Elsevier, vol. 58(C), pages 256-266.
    • Handle: RePEc:eee:streco:v:58:y:2021:i:c:p:256-266
    DOI: 10.1016/j.strueco.2021.06.002
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    References listed on IDEAS

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    More about this item

    Keywords

    GVCs; Mobile handsets; Value-added; Smile curve; Functional specialization;
    All these keywords.

    JEL classification:

    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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