Huawei to start assembling smartphones in India from Oct

24 September 2016

China's Huawei Technologies Co will begin assembling phones in India with manufacturing partner Flextronics International Ltd, establishing a presence in the world's fastest-growing smartphone market.

The Chinese company expects to have Flex put together its first gadgets starting October, Jay Chen, the chief executive for Huawei's Indian business, said.

 The facility will make three million units initially and provide 10,500 jobs, Huawei said.

Targeting a 10 per cent share in Indian smartphone market, Huawei also plans to expand its Indian retail network by raising the number of outlets it partners to more than 50,000 by the end of the year.

''Flextronics will hire 1,500 people dedicated for servicing Huawei smartphones," Jeff Reece, president, networking solutions, Flextronics said said.

Huawei, the world's third-largest smartphone maker, joins rivals from Samsung and Apple in targeting one of the few markets still rapidly expanding as global demand stagnates. But intense competition between market leader Samsung and Chinese names such as Xiaomi and Lenovo has begun to depress margins. Grabbing a solid share of India however could further Huawei's stated ambition of displacing Apple and Samsung to become the world's top maker of phones.

India, the world's second-largest smartphone market, is on the cusp of a phone manufacturing boom spurred by the government's "Make in India" drive. Huawei joins a growing list of foreign names, from Xiaomi to Lenovo, now getting their phones put together in the country. For now however, that mainly consists of assembling semi-knocked-down phone kits rather than the end-to-end manufacturing China's known for.

Chinese companies in particular have been keen to set up shop in India, as growth at home slows. Before Huawei, LeEco was the most recent to get in on the act, contracting a facility to assemble 60,000 phones a month, rising eventually to 200,000.

More than two-thirds of the smartphones shipped in the first quarter of 2016 were assembled in India, said Jaipal Singh, a market analyst for client devices at researcher IDC. Vendors who are currently assembling phones are likely to start manufacturing components like batteries, chargers and data cables with tax incentives offered by the federal and regional governments, IDC said in a report.

Huawei has emerged in past years as China's leader in high-end phones, eschewing the lower-end models that rivals like Oppo and Vivo favour. Founded in 1987 by former army engineer Ren Zhengfei, Huawei used its business of selling networking gear to bankroll its initial foray into premium phones. It's among a crop of Chinese smartphone vendors now steadily draining market share from Samsung and Apple globally.

The company's devices unit grew sales 73 per cent to $20 billion last year, out of total revenue of about $61 billion. Huawei now plans to sustain its pace of investment in research -- to the tune of $9.2 billion last year --as carriers prepare to build fifth-generation broadband networks in coming years.

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