OnePlus India Plan: Follows rival Xiaomi in contracting Foxconn to make phones in India

OnePlus India Plan: Follows rival Xiaomi in contracting Foxconn to make phones in India

NEW DELHI (NewsRise) — Chinese smartphone maker OnePlus has teamed up with Taiwan’s Foxconn Technology to start making devices in India, as handset makers seek to cut costs amid intense competition for market share in the world’s second-most populous nation.

     The partnership follows a similar tie up in August when China’s Xiaomi joined hands with iPhone maker Foxconn to start assembling its smartphones in India. The manufacturing contracts also help Prime Minister Narendra Modi’s goal to turn the nation into a global production hub, as he seeks to create millions of more jobs and revive economic growth.
     Foxconn will assemble the OnePlus phones at its factory in the southern state of Andhra Pradesh, where it is also making Xiaomi devices. The facility will have a peak capacity of up to 500,000 units per month, allowing OnePlus to locally fulfill demand in India in the future, the Chinese company said in a statement on Monday. OnePlus, which entered the country last December, currently makes its devices in China and ships them to India.

     “This move will strengthen our presence and help us step up momentum in India,” OnePlus founder and CEO Pete Lau said in the statement. “Producing smartphones in India is one of the most important decisions.”

     OnePlus and Foxconn didn’t disclose the size of their investment.

     According to research firm Strategy Analytics, India will overtake the U.S. to become the world’s largest smartphone market  behind China by 2017, selling 174 million units a year, compared with an estimated 118 million this year. Rising disposable incomes, a young population and a growing middle class is expected to spur growth in mobile data, making the South Asian nation a lucrative market for foreign smartphone makers.

     “No serious global hardware or software player can afford to ignore the huge Indian smartphone market today,” Strategy Analytics said in a note in July.

     Smartphones such as OnePlus and Xiaomi offer a price advantage to premium products such as Apple iPhone and Samsung S6, appealing to cost-conscious young customers in a country where many buyers are first time users. The market in India is currently dominated by Samsung and local smartphone maker Micromax Informatics.

     Apple has roped in mobile services provider Bharti Airtel to boost sales of its latest offerings, the iPhone 6s and iPhone 6s Plus, as it seeks to build on record sales of 1.7 million units in the country in the previous financial year. Bharti Airtel said Tuesday it will offer the iPhone 6s and iPhone 6s Plus, starting Friday through 235 of its retail stores across the country. Bharti, the first to roll out high-speed fourth generation internet services in India, is offering 4G data along with the phones.

     Foxconn has been stepping up investments in India as it seeks to benefit from Modi’s manufacturing push. Chairman Terry Gou has said the company is prepared to invest about $2 billion on technology projects in India over the next decade if the government addresses infrastructure deficiencies. The company may build as many as 12 plants in India, he said earlier this year.

     Foxconn, along with China’s Alibaba Group, has invested $500 million in online retailer Snapdeal. In June, Foxconn tied up with Japan’s SoftBank and Bharti Enterprises on a $20 billion Indian solar power project, and has also said it was in talks with New Delhi-based GreenDust, which sells refurbished goods and factory seconds. Adani Enterprises, controlled by Indian billionaire Gautam Adani, also said in a stock exchange filing earlier this year that it was in talks with Foxconn to form a joint venture.

OnePlus India Plan: Follows rival Xiaomi in contracting Foxconn to make phones in India