Smart Phone Business: Can India overtake China in manufacturing of phones?
Indian Smartphone industry is a seven billion dollar industry. Today we can find a smartphone in almost every second hand in the country. The initiatives that have been taken by the Indian Government in recent years has not only supported the manufacturing of smartphones in India but also has increased the user interest and decreased the dependency on other countries for our demands. But can we be better than China or can we overtake china in this aspect? Let’s discuss.
Smart Phone Manufacturing in India- How to boost the process?
A phone manufacturing company is not more than an assembling company in case of smartphones. One may find that neither Apple nor Samsung manufacture their products using only their material. Instead, the phone is manufactured by assembling the screen of one company, with the battery of other and camera of the whole other one. This way we can note that India to overtake China needs to not only open its gates for giant smartphone companies but also for the companies that manufacture their parts individually.
More than 89% of cameras in India are manufactured by Sony and screens are manufactured by LG or Samsung. India needs to lure these companies by providing them with easier investments and easing the FDI conditions for them.
Smartphone Business in India - How it was overtaken by China?
Earlier India was lead by companies like Micromax beating Samsung India to become a number one. This was the time between 2013-2015.
Xiaomi, Oppo and Vivo were just in the initial stage then. Chinese companies worked on the model of economies of scale to boost up their sales. They manufactured millions of smartphones reducing their cost of manufacturing and thus they were supplying good phones at a lower cost. Xiaomi is a leading supplier in the smartphone market in India.
Indian companies lacked majorly in innovation, quality and were focussed on gaining huge profit margins in a shorter period of time. This is why they lost the race to Chinese companies back then.
Even when the Indian Government launched Make In India, Chinese companies started their manufacturing here providing them with cheaper and easily available labour to reduce their costs.
India does not manufacture processors and silicon chips. India lacks in this technology and getting indigenous products in this area is difficult for the next 5 years.
Major Indian Mobile Manufacturers
Micromax Informatics is the largest Indian mobile manufacturer which is headquartered in Gurgaon, Haryana. It was founded by Rahul Sharma in 2000.
Intex Technologies was started in 1996 by Narendra Bansal and is the second-largest mobile company in India. It is headquartered in New Delhi and has a huge range of products to its account such as Smartphones, LED TVs, Speakers, Tablets, Feature Phones, ACs, UPS, Coolers, etc. The company has a revenue of INR 6200 Crores and has 10,000 and more employees.
Lava International is the third-largest Indian mobile company and is headquartered in Noida. It was founded by Hari Om Rai and others in 2009 and is into manufacturing smartphones, tablets, and laptops. The company has a 542 Crore revenue.
Karbonn Mobile company was the baby of Sudhir Hasija & Pardeep Jain and began in 2009. It is headquartered in New Delhi. The company makes mobiles, tablets, feature phones, and Tablets. It has a revenue of INR 650 Crores and has 10000+ employees.
iBall Mobile company was started in 2001 by Anil Parasrampuria. It is headquartered in Mumbai, Maharashtra. The company imports computer accessories, smartphones, tablets, routers, and speakers. They employ more than 2000 people and has a turnover of Rs. 2000 crores.
Reliance Jio Lyf Mobiles is a subsidiary company of the largest Indian Telecom company JIO. It makes 4G Volte Smartphones (Jio Phone) and also other Android mobiles, WIFI dongles. The company was founded by Mr Mukesh Ambani, in 2015 and is headquartered in Mumbai, Maharashtra.
Spice Mobiles is part of Spice Digital Ltd which was founded by Mr Bhupendra Kumar Modi in the year 2000. Spice Digital has businesses Value Added Services, Spice Telecom, and Spice Mobiles. The company launched several phones under Spice Stellar brand name. The company is headquartered in Noida and has 500+ employees.
What has changed since the past 5 years?
India has started manufacturing batteries. Samsung has a massive facility in Noida where they can even make PCBs and other essential components. Samsung in June 2020 announced about setting up a plant in Uttar Pradesh with an investment of 5000 crores to manufacture display panels in the country.
TATA has also taken an initiative to invest in an electronics manufacturing facility in Chennai. Many other companies are investing under production linked incentive scheme. Through this scheme, the companies until the manufacturer start the production they cannot generate profits. This would force many companies to begin their manufacturing process in India now.
India is the second-largest manufacturer in smartphone manufacturing now. Almost 40% of the market has been captured by India.
Now that China has gained some bad market after Corona outbreak, India can take advantage of this sentiment and attract more manufacturing units in India.
Thus with the pace, the Indian market is moving towards profits one can say that in the next 10 years India would be way ahead of China in manufacturing of smartphones.