Xiaomi ties up with Fox­conn to as­sem­ble smart­phones in In­dia

The Pak Banker - - COMPANIES/BOSS -

Chi­nese smart­phone maker Xiaomi Corp. on Mon­day be­came a high-pro­file ad­di­tion to the list of global com­pa­nies that are man­u­fac­tur­ing in In­dia in a po­ten­tial boost to Prime Min­is­ter Naren­dra Modi's flag­ship Make in In­dia pro­gramme.

Xiaomi, the world's sec­ond most valu­able start-up, an­nounced that Fox­conn, the trade name for Hon Hai Pre­ci­sion In­dus­try Co. Ltd., the world's big­gest con­tract man­u­fac­turer, has started as­sem­bling phones for it at a fa­cil­ity in Sri City, an in­dus­trial park in Chit­toor dis­trict of Andhra Pradesh.

Fox­conn will be as­sem­bling a new de­vice, Redmi 2 Prime. Xiaomi ex­pects the con­tract man­u­fac­turer to even­tu­ally build its en­tire range of phones in Sri City.

The fa­cil­ity will house a 100-me­tre assem­bly line that will put to­gether phones with com­po­nents im­ported ini­tially from China. Over time, Hugo Barra, Xiaomi's vice-pres­i­dent who over­sees its global oper­a­tions out­side China, ex­pects the elec­tron­ics com­po­nent ecosys­tem to be cre­ated in In­dia. "Our be­ing here solves the chicken and egg prob­lem of com­po­nent ecosys­tem," Barra said at a media brief­ing in Visakhapatnam, Andhra Pradesh's big­gest city. Barra ex­pects charg­ers, bat­ter­ies and the "much more com­plex" mem­ory units to be man­u­fac­tured in In­dia.

Fox­conn on Satur­day said it would in­vest $5 bil­lion in Ma­ha­rash­tra to cre­ate an elec­tron­ics man­u­fac­tur­ing hub over the next five years.

Pro­nounced Shiao-Me, Xiaomi is the sev­enth big­gest smart phone maker glob­ally, ac­cord­ing to a May re­port by tech­nol­ogy re­search firm Gart­ner Inc. It sells low- and mid-range smart­phones un­der the Redmi and Mi brand names.

"We have cho­sen our high­est vol­ume prod­uct to man­u­fac­ture lo­cally," Barra said on Mon­day. Xiaomi has sold 3 mil­lion smart­phones and tablets in In­dia since July 2014 when it en­tered the coun­try.

The com­pany has no im­me­di­ate plans for ex­port­ing the de­vices made in In­dia, said Manu Ku­mar Jain, the head of Xiaomi Tech­nol­ogy In­dia Pvt. Ltd., the In­dia unit of Xiaomi.

The Sri City unit will be Xiaomi's sec­ond pro­duc­tion fa­cil­ity out­side its home base of China. It cur­rently op­er­ates an assem­bly unit in Brazil. Like the In­dia unit, the Brazil assem­bly fa­cil­ity also makes de­vices for the lo­cal mar­ket.

The com­pany will only as­sem­ble phones at the fa­cil­ity. It has no im­me­di­ate plans to make other prod­ucts such as fit­ness bands or tablet de­vices in In­dia, said Jain. Com­pany ex­ec­u­tives re­fused to dis­close its in­vest­ment in the plant, its ca­pac­ity, or the num­ber of em­ploy­ees at the fa­cil­ity. But Jain said work­force num­bers at the unit are in­creas­ing on a "week-on-week ba­sis; on a month-on-month ba­sis".

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