Just as everywhere else, location matters at the Mobile World Congress. The biggest trade show for mobile electronics takes the shape of a sprawling temporary city erected every February in a cavernous convention center in Barcelona, Spain. Hall 3, with its central location, is the most desirable neighborhood, with displays by Sony (SNE), Nokia (NOK), LG Electronics (066570:KS), and Lenovo (992:HK). Samsung Electronics (005930:KS) has its stand here, a blinding white expanse lighted like an operating theater, where throngs ogle the new Galaxy S smartphone and Gear smartwatches under the stern gaze of Lionel Messi and Cristiano Ronaldo. At one end is an ad featuring some of the biggest stars from every soccer-playing nation dressed in black armored space suits, part of an ad campaign in which they have to save the world from alien domination using their soccer skills (and their Samsung Galaxy products).
Halls 6 and 7 aren’t quite as prime real estate, and the edges of these halls are even less so. Hena, Malata, iNew, the Wave Group, and some of their competitors have stands here, in the Mobile World Congress suburbs. Unlike in regular American suburbia, the plots get smaller out here. The stands are closet-size, and compared with the production values downtown it can feel a little like wandering into a middle-school science fair. These companies are all from Shenzhen, China, the workshop of today’s tech industry. When you buy a PC, it’s often actually made by one of these companies, although you’ll never see the name on the product.
In each small booth is a counter, a small display of products, and a table where deals get made. And lots of deals do seem to get made. A steady stream of buyers from—by the look and sound of it—many different markets rotate among the tables, talking about delivery times, and motherboards, and screen resolution. This, as much as the glitzy announcements for new handsets, is what this trade show is about.
Some of these firms are original equipment manufacturers, which means they manufacture products—phones, tablets, routers, storage devices, PCs—that other companies design. Some of them are original device manufacturers, which means they do the design themselves. Most present themselves as both. Some also offer phones under their own brand names for sale in China.
Everyone wants to make this climb up the supply chain—and the walk back toward the center of the hall will reveal some examples of success. Gionee might be unknown to most American and European phone buyers, but its $100 smartphone has helped it become one of the top three Chinese-made mobile phonemakers in China, after the better-known Lenovo and Huawei Technologies (002502:CH). According to Homan Hong, a marketing executive working the Konka (000016:CH) stand, his company has started in the last few years to market phones under its own brand in India and Indonesia.
These are baby steps. But if you look at Lenovo, China’s biggest tech success story so far, one of the things that strikes you is how fast it went from baby steps to bestriding the globe. Two years ago the company didn’t have even have a stand at Mobile World Congress; this year, having just announced its acquisition, its poised to become the No. 3 mobile phone manufacturer in the world. Lenovo isn’t just any Chinese company, and it had to do a lot right to succeed as it has, but it’s enough to put a gleam in the eye of an manufacturer out here in the conference-hall margins.