Len­ovo starts man­u­fac­tur­ing smart­phones in In­dia

The Pak Banker - - COMPANIES/BOSS -

S HANGHAI: Chi­nese per­sonal com­puter maker Len­ovo Group Ltd on Tues­day said it has started as­sem­bling smart­phones at the 40,000 sq. ft fa­cil­ity in Chen­nai run by Sin­ga­pore-based con­tract man­u­fac­turer Flex­tron­ics In­ter­na­tional Ltd.

The fac­tory will have two ded­i­cated lines to man­u­fac­ture Len­ovo and Mo­torola smart­phones. The com­pany plans to pro­duce 6 mil­lion units in 2015-16 be­gin­ning with two 4G mod­els, Moto E and Len­ovo K3 Note, and raise it to 12-14 mil­lion units in the next fi­nan­cial year. The move is sig­nif­i­cant for Len­ovo glob­ally, as the Chi­nese gi­ant looks at an in­te­grated model for both Len­ovo and Mo­torola brands of phones.

The idea is to drive ef­fi­ciency, said Amar Babu, who in July be­came chief op­er­at­ing of­fi­cer for Asia Pa­cific and chair­man, Len­ovo In­dia, from In­dia man­ag­ing di­rec­tor. The firm plans to source 30% of the com­po­nents lo­cally for the In­dian mar­ket, said Babu, but de­clined to give any time frame. "We have seen sev­eral com­pa­nies com­ing back for man­u­fac­tur­ing smart­phones. In­dia has be­come the fastest grow­ing smart­phone man­u­fac­tur­ing des­ti­na­tion," said Ajay Ku­mar, joint sec­re­tary, depart­ment of elec­tron­ics and in­for­ma­tion tech­nol­ogy. "Smart­phones, which is the cen­tral plat­form for Dig­i­tal In­dia, has be­come the ful­crum of make in In­dia."

Len­ovo's an­nounce­ment takes a cue from such plans by many oth­ers to as­sem­ble phones in In­dia, giv­ing a push to the Make in In­dia ini­tia­tive. On 29 July, Kar­bonn Mo­bile In­dia Pvt. Ltd set up a 150,000 sq. ft plant with an in­vest­ment of Rs.50 crore in Noida in part­ner­ship with a mo­bile phone de­signer, man­u­fac­turer and sup­plier firm Wa­ter World Tech­nol­ogy Co. In the past cou­ple of months, smart­phone brands Xiaomi Corp., InFo­cus have part­nered with Fox­conn Tech­nol­ogy Group to man­u­fac­ture de­vices at the lat­ter's Andhra Pradesh fa­cil­ity. OnePlus said it is in talks with Fox­conn to close a deal, but the lo­ca­tion of the plant has not been fi­nal­ized yet.

Ear­lier this month, Fox­conn an­nounced a $5 bil­lion in­vest­ment to set up man­u­fac­tur­ing units in Ma­ha­rash­tra over the next five years. Lava In­ter­na­tional Ltd, which has an assem­bly unit in Noida, said it will in­vest Rs.2,615 crore over the next seven years to set up one more fac­tory in the coun­try by 2017. In­dia has been the key mar­ket for Len­ovo since the past 10 years af­ter the com­pany ac­quired the per­sonal com­puter busi­ness of In­ter­na­tional Busi­ness Ma­chines Corp. (IBM) in 2004. In 2014, it ac­quired IBM's server unit. The same year it ac­quired Mo­torola Mo­bil­ity from Google Inc. and be­came the third-largest smart­phone man­u­fac­turer glob­ally.

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