- First time in history, US companies which operate mainly in handset bundling model and source devices from China will use devices made by Indian manufacturers.
- More than 250 companies- American, Japanese, Taiwanese and Korean are looking for a base shift to India from China due to the growing tensions amid US-China trade war.
The US-China trade war has started benefitting India as US Teleco major AT&T along with rivals T-Mobile and Sprint have placed smartphone orders worth around Rs. 2,500 crore for under $200 devices with Indian brands Lava and Micromax in order to avoid business due to Sino-US trade tensions.
First time in history, US companies which operate mainly in handset bundling model and source devices from China will use devices made by Indian manufacturers.
This order will come as a respite for both Lava and Micromax, whose smartphone assembly plants are under-utilized as the market share of Indian players slumped to 3 percent in a market dominated by Chinese players such as Xiaomi, Oppo and Vivo along with Korea’s Samsung.
The devices ordered are expected to be branded as AT&T under the contract manufacturing clause. The 4G phones will be under the sub-$200 category which is about 25 percent of the global $460 billion smartphone market globally. By volume, this category comprises close to 66% of the two billion markets.
More than 250 companies- American, Japanese, Taiwanese and Korean are looking for a base shift to India from China due to the growing trade tensions between the US and China.
India is looking to cash upon this opportunity as a committee set up by the Prime Minister’s Office (PMO) under the leadership of Niti Aayog Chairman is looking for ways to encourage electronics manufacturing in India.
All these developments are happening parallel with the trade talks between the world’s two largest trading partners deteriorating with the US slapping more trade tariffs on $300 billion worth Chinese imports last week.
“This planned arrangement of manufacturing budget segment phones for other telco carriers can be seen as a positive move by the Indian brands, since this allows them to find some avenues of growth and help sustain the operations, in presence of the relentless aggression by China-based brands, across price segments,” Navkender Singh, research director at IDC said.
American companies are scouting places outside to assemble smartphones. This can come as a new life for these two Indian handset makers and pave way for other local players also.
With Chinese companies dominating the smartphone market, Indian companies are left with few options such as exploring other consumer electronics or work as distribution arms of these giants.
This comes as a wave of fresh air for Indian local players among the fight of two big giants. It’s time for the local players to capitalize on this.