If you're Apple, Dell, or some big electronics conglomerate I'm sure the rules are very different (mostly because they are big enough to enforce meaningful financial penalties for not following the "rules"). They're also big enough to have their own QA staff *on site* to get timely reports on both quality and production snafus. You can also afford to hire a local "consultant" to bribe local officials and business owners with money/cars/girls/etc while denying that you're involved in foreign corruption. If you're a small-time operator occasionally ordering a run of a few hundred units of consumer electronics...good luck. Outsourcing software design to them on top of the hardware integration and manufacturing is downright foolish. Short of not paying them, you (the collective you) have zero levers to control the process. So as a consumer, if I'm stuck buying product from China, who do I want on my team if there are problems with my shiny new device? A big multi-national that can support the product on their own or a company with a no technical people who will call up their "Chinese partner" to deal with bugs? (that was a rhetorical question for the sarcasm impaired)
Does that mean every small company is going to get boned in China? No, but it is VERY common.
From other things I've read through the years, this summary makes a lot of sense to me.
As I've posted a while back ago, Outlaw should have had the 978 contract designed in the US and manufactured in China if they wanted to reduce costs. A good example of this strategy would be OPPO Digital Inc. of Mountain View (CA) with its excellent success using this approach since about 2004. Other overseas examples that have also successfully used this approach for about a decade are Cambridge Audio in the UK and Vincent Audio of Germany.
At the very least, the software design and integration, which is highly critical and a major source of issues for this type of project, should have been done in the US. That's probably Outlaw's biggest mistake. Then again, I believe that not sticking through with the Inkel deal was also a major mistake. The South Koreans, while there are varying levels of business corruption everywhere, are not the Chinese.
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