Saturday, May 27, 2006

India churning out mobiles for world market

India seems to be hotting up as a destination for mobile giants like Nokia, Motorola and Sony these days. Everybody is making a beeline to set up phone manufacturing units in India to not only cater to the domestic segment, but also churn out a significant part of the world demand from India. Several reasons have been thrown forth by the media to explain this sudden spurt of interest among the phone companies.

  1. Distributing risks is a primary concern for most of these mobile companies that already have a unit in China. India offers them a far more stabler option when compared with the Dragon country.
  2. India has a huge domestic market that adds close to 30-50 million new subscribers to the mobile segment every year.
  3. The presence of the booming software revolution in India helps the mobile companies to reduce research and design costs by setting up firmware centres in India that take advantage of the talented human resource pool and the low wages.
    • Ex : More than 40 percent of the software that goes into Motorola Inc.'s iconic and ultra-thin RAZR handset is developed in its Indian R&D facility.
Examples of this new trend with the mobile/phone manufacturing companies is revealed by a casual glance at newspapers
  • Nokia, which controls nearly half the $2.5 billion Indian handset market, and its suppliers are investing about $150 million in its Chennai unit, which makes a few million handsets a month and has already exported phones to south east Asian nations like Singapore, Indonesia and Thailand.
  • South Korean conglomerate LG Electronics Inc., for its part, operates a plant in Pune that will churn out 20 million GSM and CDMA handsets by 2010, roughly half of which are earmarked for export.
  • Telefonaktiebolaget LM Ericsson in Stockholm is planning to make radio base stations in India.
  • Elcoteq Network Corp, an Espoo, Finland based electronics manufacturing services company, is also setting up a manufacturing facility in Bangalore, India.
Trends like these turn out to be the trickle before the flood. With Bangalore's Electronics City and Hyderabad's upcoming Fab City boosting hardware capabilities of the country, even chipsets for the phones might be available right here in India. That would be the moment that might tip the scales in India's favour. It may then be just a matter of time before India can also call itself the Mobile Manufacturing Base of the World.

2 comments:

mahesh said...

Way back in 2001,Sasken was developing the firmware & making reference designs for chipset vendors like TI,Philips... I'm proud say that I was part of both and some of our designs are there in present Nokia & Samsung lines of phones.
- maheshsd

Vijay said...

Yeah TI was one of the pioneers that bought chip making to India. You could read all about that here : http://india-it-pulse.blogspot.com/2006/02/chips-ahoy-india-grabs-world.html

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