Bandit cellphones: A blue ocean strategy

The cellphone market has been dominated by global brand companies for years. However, “bandit” cellphones (i.e., unbranded or unknown-brand “white box” cellphones) have introduced a new business model that is changing the rules of the game. Low cost, high value-added features are characteristic of bandit cellphones. Developing countries offer huge market potential for the growth of bandit cellphone sales. MediaTek (the biggest supplier of chips for bandit cellphones in China) and many small and medium-size Chinese companies have created new businesses in the manufacture and sales of these cellphones. This paper uses the blue ocean strategy, proposed by Kim and Mauborgne, to analyze the bandit cellphone strategy. This analysis provides a good example in the field of strategy and innovation management.