Chips, motherboards, cases, batteries, LCD screens, and connectors: neatly displayed like fruit and vegetables i(or should that be exotic spcies?)in store after store in the crowded warrens of Shenzhen’s Huaqiangbei market are all the ingredients you need to build a mobile phone.

Currently, this would in all likelihood be an affordable feature phone rather than a top of the line smartphone, but Android and no doubt Windows 7 mobile based devices are on the way, and, besides, the low cost mobile phone market in both China and emerging countries such as India and Latin America is massive – over 100 million units a year.

The rapid growth of this market has led to the emergence of a huge and vibrant ecosystem that includes thousands of companies involved in everything from PCB layout and design to final assembly and sales and marketing. In short, this is a classic industrial cluster – one in which mutual competition and sharing of expertise between the myriad companies in the ecosystem will drive a continuous cycle of product innovation and market growth.

The Huaqiangbei market reminds me very closely of the PC industry cluster that was formed in Taiwan twenty years ago, out of which have emerged giants such as Acer and Asus, not to mention the fabs in Hsinchu and semiconductor design houses such as VIA.

Right now, most of the companies in the Shenzhen mobile phone cluster are still very small, but already players such as Tianyu are beginning to increase their share of the China market and build up their brand name and some are also aggressively entering global markets.   

It’s going to take some time, but there’s a strong chance that the next major global phone brand name will rise from the Shenzhen ecosystem – though of course it’s impossible to predict who it will be. Maybe I walked past it without noticing during my visit to Huaqiangbei market.