This thesis seeks to understand product development and innovation of Chinese domestic mobile phone producers from a 'Sectoral Systems of Innovation' approach. It concentrates on the impacts of institution and nature of knowledge on the innovation process. Empirically, this thesis examines institutional frameworks imposed by the Chinese government and their impacts on the innovation process. It also studies strategies of the domestic producers to launch and innovate their products, and the relations between the domestic producers and different actors such as component producers and technology providers....[ Read more ]

This thesis seeks to understand product development and innovation of Chinese domestic mobile phone producers from a 'Sectoral Systems of Innovation' approach. It concentrates on the impacts of institution and nature of knowledge on the innovation process. Empirically, this thesis examines institutional frameworks imposed by the Chinese government and their impacts on the innovation process. It also studies strategies of the domestic producers to launch and innovate their products, and the relations between the domestic producers and different actors such as component producers and technology providers.

Documentary- and interview-based data demonstrates that the Chinese government has manipulated institutional framework for the purpose of encouraging learning and growth of the domestic industry. However, it has been difficult to achieve these aims in short term because the domestic producers have to adapt to the fast-moving technologies and ever-changing demand in the market. Currently, leading domestic producers are 'walking on two legs' : they launch products by cooperating with foreign mobile phone producers to adapt to the market on one hand, and develop their own products to acquire knowledge and technology gradually on the other. They concentrate on acquiring some layers of the technologies within their competence, while relying on outsides firms for most core technologies. Moreover, they mainly innovate in appearance and applications of the products where they have to utilize their knowledge of customer's demand. It is possible for the domestic producers to concentrate on part of the product because they can access the modular core technologies through collaboration with the specialized actors which emerge as a result of vertical disintegration and specialization of the mobile phone industry in recent years.