Smartphone Vendors Ride On Make In India Wave
Since the Government of India announced the ambitious “Make in India” initiative to boost local manufacturing, India has emerged as the most attractive investment destination for industries. While MNCs are exploring business prospects, and competitive advantage in local manufacturing in the country, smartphone vendors are already riding on the “Make in India” wave. After leading smartphone brands such as Vivo, Oppo, Micromax and Karbonn have already set up their facilities in the country, another domestic handset maker, Lava International is now aiming to double its production capacity with the launch of second assembly unit in Greater Noida.
According to the PTI report published in TOI, Lava International is in the process of setting up a second assembly unit in Greater Noida as part of ramping up production capacity. The company currently has its first assembly unit Noida with a capacity of producing one million units per month. “With the second unit also in Noida, the total plant production will be increased to around 2.50 million units”, Senior Vice-President and Hub Head, Luke Prakash said.
Besides the two assembly units, the company has also planned to set up two green field manufacturing project, one to come up in Yamuna Expressway and the other at Tirupati, Andhra Pradesh. The second plant in Tirupati, Andhra Pradesh would come up on a 20-acre land. The company is also planning to expand its Research and Development unit in Bengaluru with investments of about INR 200 crore. “Total investments earmarked for the plants include INR 2,615 crore,” Solomon Wheeler, Lava International Ltd., Vice-President and Head, Marketing and Communication, said.
Another leading domestic smartphone vendor, Micromax has announced to invest INR 300Cr for three manufacturing plants in India. The new plants will be set up in Andhra Pradesh, Rajasthan and Telangana, and will be operational by next year. Apple which is going through tough times in China and US is also keen to explore local manufacturing, Foxconn, which is a largest manufacturer of Apple devices, has announced to set up $10 billion iPhone manufacturing plant in the country. Chinese smartphone vendors are also heading the race with Vivo, Oppo, Xiaomi rolling out crucial business plans in the country.
The local manufacturing not only intends to reduce dependence on imports, but also generate employment in the country. The vendors are also focusing on the Make in India devices by offering customization in their offering. According to the Morgan Stanley research report, ‘Make in India’ program has boosted the growth of the smartphone industry in India. The report also revealed that the initiative has largely benefited the domestic handset players and encouraged “Make in India” mobile handsets.
The recent CyberMedia Research (CMR) report stated that India shipped a total of 52.8 million handsets in Q2, 2016.India is expected to overtake the US as the second-largest smartphone market next year with robust annual growth. According to the CMR , the country’s smartphone market will grow at a compounded annual growth rate (CAGR) of 23 per cent through 2018 and would account for 30 per cent of the global growth during the period.
According to the Morgan Stanley research report, India will emerge as the second-largest smartphone market next year and overtake the US. The growth is largely coming from the mid-range segment, therefore, smartphone brands are increasingly focusing on the large chunk of population having the potential to shift from feature phones to smartphones. Additionally, the Tier II, Tier III cities and towns are also fueling the growth of the smartphone industry. Hence, all the smartphone makers are racing against each other to capitalize on these growth factors.