Chinese smartphone maker Xiaomi Inc has tied up with Taiwan’s Foxconn to start assembling phones in India – its first such move in the world’s third largest smartphone market as it seeks to expand its market share and cut costs.
Since Xiaomi already sells its low-cost phones in India, a manufacturing presence would help the company in gaining a stronger foothold by allowing it to handle inventory more efficiently and reduce shipping lead times.
An assembly line in the southern state of Andhra Pradesh will begin rolling out Xiaomi’s first locally made smartphone, the Redmi2 Prime, the company’s global vice president Hugo Barra said. All of the Redmi 2 Prime devices produced there will be sold in India.
“It’s not only about designing for India, we want to make in India and be closer to our consumers,” Barra told reporters. He declined to disclose the size of the investment made in setting up the assembly line.
The assembly line marks a return for Foxconn, officially known as Hon Hai Precision Industry Co (2317.TW), to the Indian market. The world’s largest contract electronics manufacturer was forced to shut up shop in Asia’s third-largest economy last year after client Nokia stopping making phones at that plant.
Foxconn has already started producing Redmi 2 Prime at their Sri City factory. Xiaomi has a similar facility, in partnership with Foxconn in Brazil apart from China. “The unit in Brazil and the one here are exactly the same. It took us about three times more the time to start manufacturing in Brazil than in India,”said Barra.
Details about the phone
The first Mi phone to be manufactured in India is Redmi 2 Prime, an enhanced version of Redmi 2 with 2GB RAM and 16GB Flash, which will be available for Rs 6,999 on Mi.com and other partner sites (Flipkart, Amazon, and Snapdeal) starting August 10. Redmi 2 Prime features a Qualcomm Snapdragon 410 64-bit processor, 4G Dual SIM support, and a 4.7″ HD display. With the memory upgrade, Redmi 2 Prime offers an even smoother user experience and more space for apps and media.
Foxconn has already started producing Redmi 2 Prime at their Sri City factory. In fact, the company has even said that it would invest $5 billion over the next five years in India to develop and build an electronics manufacturing plant in Maharashtra, as well as establish additional factories and data centers in the country.
Xiaomi-India head Manu Jain said they had lot of plans for India without specifying their investment roadmap for future.
After kicking off its operations as a start-up in 2010 by serial entrepreneur Lei Jun, Xiaomi, with the help of Mi fans, had sold 61 million handsets in its first four years. It also diversified into Mi Note Pro, Mi Note, Mi TV, and other products.
Not a smooth sailing?
But Xiaomi’s push into India may also be met with skepticism. As this Wired piece points out, ” the company has long faced concerns in India over its Chinese roots, with some worried that the Chinese government will snoop on the Internet services that Xiaomi phones provide to consumers.