Fierce competition is transforming the shanzhaiji - or “mountain village mobile phones” - market and its cultural impact.

Creation is the key to surviving the highly competitive cellphone market,such as this winnie-the-pooh.

Principal of Newport Technologies Karl Weaver, who specializes in shanzhaiji, says “Shanzhai mobile phones have shown pretty impressive innovation in terms of technology, appearance and manufacturability, which find no parallels.A lot of unusual technologies and designs are combined together. These combinations bring out a wild variety of functions, although most infringe on the original manufacturer in some way.”

For years, most users used “shanzhai” to just mean “fake”. But the vicious rivalry among shanzhaiji manufacturers is shifting the industry from imitation to innovation. With more than 10,000 black market handset makers in Shenzhen alone pushing units for profits of 10 to 20 yuan ($1.5-3) apiece, low revenues and high competition means shanzhaiji makers must now get creative to survive.

China is the world’s largest handset market with about 650 million mobile users and another 8.52 million sets sold every month. Last year, about 250 million shanzhaiji entered the market, Weaver says.