Sat, Sep 24, 2016 - Page 11 News List

Huawei making move to tap India market boom

ASPIRATIONS:The world’s third-largest smartphone maker is taking advantage of India’s ‘Make in India’ push, focused on displacing rivals Apple Inc and Samsung

Bloomberg

Huawei Technologies Co (華為) is to 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 handsets starting next month, 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.

However, intense competition between market leader Samsung and Chinese names such as Xiaomi Corp (小米) and Lenovo Group Ltd (聯想) has begun to depress margins.

Grabbing a solid share of India could further Huawei’s 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 Indian 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, but for now, that mainly consists of assembling semi-knocked-down phone kits rather than the end-to-end manufacturing China is known for.

Chinese companies in particular have been keen to set up shop in India as growth at home slows. Before Huawei, Chinese video streaming company LeEco (樂視) 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 this year were assembled in India, said Jaipal Singh, a market analyst for client devices at researcher International Data Corp (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 Indian federal and regional governments, IDC said in a recent report.

Huawei has emerged in past years as China’s leader in high-end phones, eschewing the lower-end models that rivals like Oppo Mobile Telecommunications Corp (歐珀移動) and Vivo Communication Technology Co Ltd (維沃移動通信) favor. It is 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 percent to US$20 billion last year, out of total revenue of about US$61 billion. Huawei now plans to sustain its pace of investment in research — to the tune of US$9.2 billion last year — as carriers prepare to build 5G broadband networks in coming years.

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