Product cycle, Wintelism, and cross‐national production networks for developing countries: China’s telecom manufacturing industry as a case

Focusing on the telecom manufacturing industry in China as a case, this paper contends that the existing literature needs to be expanded. Product cycle theory could be applied to explain multinational corporations’ strategies of importing and localizing their products in developing countries in order to take advantage of lower labor costs and to break barriers to the local markets. However, rapid technology changes have limited the power of traditional product cycle theory while favoring the “dynamic adding‐and‐dropping” product cycle. Meanwhile, the success of “Wintelism” and the maturity of cross‐national production networks in the global market have significant impacts on developing countries’ indigenous industries. Indigenous manufacturers start to take advantage of their strength in the distribution and production value‐chain and to outsource their weaknesses to Western corporations. This model of “reversed cross‐national production networks” represents a feasible industrialization path with great potential to enable indigenous manufacturers to emerge as competitors in advanced Western markets as well as less developed markets.