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Apple’s court victory spells trouble for local tech firms (2)

By Doug Young (Global Times)

08:33, August 28, 2012

Four of China's top smartphone makers, ZTE, Huawei, TCL and Lenovo, all include Android-powered models as important parts of their current product line-ups. ZTE has found particular success in this space, with its smartphone shipments quadrupling to 8 million units in the second quarter of 2012 as it became one of the world's top five manufacturers for the first time, thanks in large part to Android-powered models.

ZTE's growing reliance on the US for its smartphone sales would make it vulnerable to a lawsuit by Apple, and TCL would also be vulnerable since it relies heavily on western Europe for its sales. Even Huawei and Lenovo could be at risk, as both are looking to Western markets to drive their future smartphone growth.

Smartphone executives at all the big Chinese manufacturers are probably holding hastily arranged crisis meetings this week as they try to figure out how to modify their models to avoid being targeted in the next round of lawsuits. But in addition to looking for short-term solutions, these companies should also look more closely at the underlying factors that got them into this difficult situation.

Specifically, Chinese manufacturers should ask themselves why they decided to rely so heavily on an OS developed by an outside company like Google. Instead of relying on outsiders for such important technology, these companies should think seriously about developing their own proprietary systems for their future products, even though such efforts require more time and resources. If they continue to rely on outsiders like Google, they run the risk of not only exposing themselves to future lawsuits but also of perpetually remaining second-tier manufacturing specialists that lack the innovation needed to become true global technology leaders.

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