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

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

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.

"Shanzhai mobile phones have shown pretty impressive innovation in terms of technology, appearance and manufacturability, which find no parallels," says principal of Newport Technologies Karl Weaver, who specializes in shanzhaiji.

"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."

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.

In Beijing's Zhongguancun electronics market, vendors peddle fake Nokia phones with electric shavers and two SIM card slots - features the real brand doesn't offer. 3G iPhone replicas with exteriors identical to the real devices are sold for 400 yuan compared to $299. Others are printed with names like "Sunyericcsun".

But there are also quirkier contraptions, such as mobiles shaped like cigarettes packs resembling those of Panda, Baisha and "Marlbara" brands. Users can put up to seven cigarettes inside. Others are shaped like automobiles, such as Ferraris, BMWs and Hummers.

Big Thunder phones are built with eight speakers. The Big Cannon Paparazzo also features a 6X telescopic lens for its 1.3 megapixel camera, a 3-inch touch-screen with Chinese handwriting recognition, double SIM slots, an additional MicroSD slot, Bluetooth, MP3 player, and a money authentication reader able to distinguish real banknotes from fakes.

The golden Buddha Heart and Karma model, which resembles a temple ornament, even comes with a certificate to prove it has been blessed by monks.

"You can call shanzhai convenient creativity," says shanzhai expert Scully Meng, editorial assistant of the London-based NGO China Dialogue.