Made in India Smartphones

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Today I saw an interesting post of banning Chinese product and software’s and everyone in India started searching to buy smartphones Made in India or made by Indian brands.

 like Xolo, Lava, Micromax, or Intex. Also, to Ban Chinese Brands especially after the Corona pandemic, and buy Indian brands or from Samsung or Apple.

Most of all not to buy from Chinese brands like Lenovo, Huawei, Oppo, Realme, Oneplus, Vivo, or Xiaomi.

Chinese smartphone brands have a market share close to 75% in India and more companies are invading India.

Many of you might be having questions:

  • Do we have 100% made in India’s smartphone?
  • Do we have a smartphone assembled in India?
  • what is the difference between a Made Vs Assembled in India smartphone?  

Before understanding the above question, lets list down the leading smartphones which are developed in China and other countries:

Chinese Smartphone Companies in India

Non-Chinese Mobile Companies in India

  • Samsung is from South Korea
  • Apple is from the US
  • Google is from the US
  • Sony is from Japan
  • HTC and Asus are from Taiwan
  • Nokia was earlier a Finnish mobile brand but now it is bought by HMD global (another Finnish company). However, the manufacturing of Nokia phones is done by Foxconn – a Taiwanese company.
  • Foxconn makes mobiles for many companies like Apple, Nokia, Xiaomi, and has manufacturing plants in China, India, Brazil, and other countries.

Made in India Smartphones by Indian Mobile Brands:

Made in India smartphones can be of 2 types:

  1. Assembled in India but brand is not of India
  2. 100% Indian mobile brands

As per a  recent report by Hindustan Times, there is a 373% increase in the value of smartphones made in India, from just Rs. 19,000 crore in 2014-15 to Rs. 90,000 crore in 2016-17. Tremendous growth and Flextronics ( the company that makes phones for Huawei, Lenovo, Motorola) at Chennai based plant can make 10 million smartphones a month, at their 100 Acre campus.

Notably, Micromax launched a smartphone called Micromax Dual 5 in India a couple of months back, which is a copy of Qiku 360 Q5 a Chinese phone.  Further, the company launched another mobile, Yu Yureka black, a copy of Wiko U Feel Prime.

Considering the above information, what does Micromax or Intex or Karbonn do?  They either assemble phones in India by importing most parts, or they straightaway buy the phones in bulk from China, rebrand them with their logo, and sell in India at a higher rate. The design is Chinese, the material is Chinese, but the brand name is Indian.

1. Assembled in India but brand is not of India

Many Chinese brands or ODMs (Original designer and Manufacturing companies) that make smartphones at their factories and give them to brands to relabel and sell. Previously, Chinese ODM that used to make phones for Micromax in the past is launching its brand in India. The brand is called Topwise and they launched the brand Comio in India. Notably, Topwise will not make phones for Micromax henceforth but will sell its label. 

Besides, Micromax was the number 2 smartphone brand in India with an 18% market share in 2014. Currently, Micromax’s share in the smartphone market is less than 2%, and Samsung, Xiaomi, Realme are the top 3 players in the market. 

A couple of years back, for Micromax and other Indian brands, the business was simple, get the Chinese phones in bulk at a low price, sell them in India and keep the margin. According to a report by Business Standard published in May 2017, only 2% of the value addition is done in India in mobile manufacturing. Also, under the Phased Manufacturing Program by the Ministry of Electronics, the plan is to increase this value addition to 10% in the next few years.

2. Fully Made in India Mobiles?

If we want to make smartphone completely in India then there are few hurdle we need to come over.

  • The required hardware like motherboard parts and other important parts are not yet manufactured in India. We may be able to but currently it is not happening.
  • Also, there are huge semiconductor manufacturing units in China and Taiwan with cutting-edge R&D that is difficult to replicate, but not impossible.
  • If we have the will to stand with Indian Government, Companies, and Start-Ups – Everything is possible.
  • Several other parts such as the display panels, camera modules, and motherboards are made in other countries and imported.
  • So, if we think there is a 100% made in India smartphone, then we need to get our facts right. However, there are many assembled in India phones available. 
  • Lastly, India has also started R&D and Design labs for creating the blueprints for new mobiles.

Quick Fact: Phones launched By the Indian Mobile brand By Sachin Tendulkar, Smartron, are also not 100% made in India. The brand has already died due to the Chinese onslaught like Micromax, Lava, Karbonn, and several others.

Jio Phones, Dongles, and other Equipment From China

JIO phone – Some months back JIO phone was in the news, and since it is very affordable, the units are also imported from China.

However, Mr. Mukesh Ambani said they may assemble it here in India, but the processor and other parts will be imported.

Recently, Mr. Ambani said that JIO is trying to work on rolling out 5G in India and will not use Chinese components for developing the infrastructure.

Dongles for Airtel, Vodafone, and Idea are mostly made by Huawei and ZTE, both Chinese brands. Notably, these are sold under the brand name of the Indian telecom operators.

There are a lot of similar examples of products brought from China and relabeled in India

Why Assemble or Make Phones in India?

Intex, Xolo, Lava, Micromax, and Karbonn followed a similar business model of getting the products from the china and selling it in India as there brand.They have earned profits in the past but are now struggling or closed shop. Now, the Chinese are selling the same phones directly to the Indian buyers at cheaper rates. It is more like cutting the middleman.    

Now Indian brands assemble phones in India. Notably, they don’t make phones in India; it is mostly an assembly of imported parts (PSB, Screen, body, etc.) from China and other countries like Taiwan. 

Also, you need to pay an import duty of 12.5% when you import a fully assembled phone from China. On the other hand, if you set up an assembly plant in an SEZ (Special economic zone); you get tax soaps from the Indian government and pay only 1% tax.

Most of all, it is considered as part of the Make in India campaign. So, most Indian, and Chinese brands have set up assembly units in India, including Xiaomi, Vivo, and Oppo. 

Vivo has a huge facility in Greater Noida to Assemble (Make) smartphones in India.

Even, the iPhone and Samsung phones are not fully made in India. The iPhone-SE is assembled in Bangalore and Samsung has a factory in Noida to assemble phones. 

Also, these companies are dominating the TV market, Earphones/Headphones, smartwatches, fitness bands, and other tech products.

However, one thing I would like to clarify that some of the Chinese companies like Xiaomi and Vivo have assembly plants (owned by Foxconn) in India to make phones. These Foxconn factories employ thousands of Indians to assemble mobiles.

Realme recently said they will hire up to 10,000 Indian workers at their Indian manufacturing plant and will have 50% of the components from India by the end of 2020. Oppo has a plant in Noida that also makes Realme mobiles.

But is it bad to assemble phones in India?

No, It is good for the economy, as there is employment generation, and it helps to create ancillary industries.

But the bottom line is still the same; the parts are imported from China, Taiwan, Korea, or other countries. As they have manufacturing plants for processors, display panels, motherboards, Ram, and other components.

What we can do to boost Local Manufacturing and Local Sales?

Prime Minister, Mr. Narendra Modi in his address to the nation on 12th May 2020 emphasized boosting local manufacturing and “being vocal about local”. He has asked Indian citizens to support Indian companies, start-ups, and local manufacturing. We need large Indian conglomerates to start mobile units to match the Chinese companies. Also, we require global investment from large tech companies that manufacture displays, processors, and other essential components to give a strong push to local manufacturing. Apple has recently announced that it will shift 20% of the iPhone production from China to India. These are positive steps for India and the growing concern for China will lead to more companies shifting base in the future. We need to have more confidence in the Indian companies and support them full-heartedly so that they can rival global companies not only from China but from other nations as well.

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