Chinese smartphones in Latin America. Geographical and institutional bases of production

Abstract

Latin America has been demonstrating steady growth of the smartphone market over the past two decades due to the “catching up digitalization” of the population. Against the background of this process, bypassing the classical stages of the development of telecommunication systems, financial technologies have flourished in the region, the 5G standard is being actively implemented. The low purchasing power of the population and the national business community contributes to the growing attractiveness of Chinese smartphone brands and production chains with Chinese participation. Thus, Latin America is the most important supplier of traditional metal resources for Chinese manufacturers of smartphones and their components. In recent years, there has been a trend with the placement of smartphone production directly in Latin American countries (Argentina, Brazil) in order to compete with brands from Japan, the Republic of Korea, the USA and Europe. Due to serious competition the penetration of Chinese manufacturers into a new market requires a new territorial organization of production. An analysis of the placement of Chinese smartphone assembly factories in Latin America over the past 10 years has shown two geographical production models. The Brazilian model assumes the placement of production facilities in densely populated industrial clusters with an emphasis on the use of skilled labor and the organization of a full production cycle directly by the Chinese brand. The Argentine model focuses on the preferences of free economic zones and only the final assembly of smartphones by local firms without an exclusive contract.