Huawei be­gins mak­ing phones in In­dia

China Daily (USA) - - BUSINESS - By BLOOMBERG

Huawei Tech­nolo­gies Co will be­gin as­sem­bling phones in In­dia with man­u­fac­tur­ing part­ner Flex­tron­ics In­ter­na­tional Ltd, es­tab­lish­ing a beach­head in the world’s fastest-grow­ing smart­phone arena.

The Chi­nese com­pany ex­pects to have Flex put to­gether its first gad­gets start­ing Oc­to­ber, Jay Chen, the chief ex­ec­u­tive for Huawei’s In­dian busi­ness, told re­porters at a news con­fer­ence.

Huawei, the world’s third largest smart­phone maker, joins ri­vals from Sam­sung Elec­tron­ics Co and Ap­ple Inc 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 Corp and Len­ovo Group Ltd 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 sec­ond­largest smart­phone mar­ket, ison­the cusp of a phone­man­u­fac­tur­ing 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 semi­knocked-down phone kits rather than the end-to-end man­u­fac­tur­ing that China’s known for.

Chi­nese com­pa­nies in par­tic­u­lar have been keen to set up shops 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 fa­vor. 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.

num­ber of phones that LeEco’s fa­cil­i­tyin In­dia can as­sem­ble monthly

BLOOMBERG

At­ten­dees test the P9 smart­phone, man­u­fac­tured by Huawei Tech­nolo­gies Co, dur­ing a launch event in New Delhi, In­dia.

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