When it comes to developing, designing and manufacturing a smartphone, the world’s manufacturers are increasingly wanting to design the product in one location but assemble the device in another. There are a few reasons for this, such as modern telecommunications makes it a simple and inexpensive process for a team to work across a number of sites and still collaborate on the one project. Secondly, customers tend to prefer a smartphone built in their local market, supporting their local economy and of course, this can reduce manufacturing and shipping costs for the relevant company. These factors are arguably more important to the developing market, where smartphone penetration is still very low and therefore the world’s device manufacturers see that there is considerable potential for growth. In the case of India, the country has recently seen the introduction of 4G LTE networks in urban areas but carriers are working on expanding their network across the rural areas. We’ve also seen development from Google with the Google Web Lite project, designed to reduce data use and improve performance of Internet (Google) searches over a slower data connection.
Turning to the smartphone manufacturers, in order to maximise the opportunities we are seeing millions being invested into building manufacturing capacity right at the target market. To this end, we’ve seen a number of mobile device manufacturers recently establish factories in India such as Lenovo, Motorola, Asus and Micromax, Just recently, HTC announced plans to establish an Indian factory. We’ve also seen a number of other manufacturers express an interest in setting up plants in the region, including Sony, Microsoft and LG. Now today Gionee has announced it is to start manufacturing devices in India and is seeking to form a partnership with a company operating factories in India.
According to the Economic Times, Gionee has shortlisted three companies, including Foxconn and Global Devices Network, and is working with these businesses. A decision is expected by the end of July and GIonee is expecting to commence commercial production by the end of the year. Gionee India’s Chief Executive Officer and Managing Director, Arvind Vohra, explained that the business has deeper plans: “In the second phase, we may also look at entering into either a joint venture or set up our own plant to support our ambitions.” Arvind explained that the company will initially make the P and M-series devices, which are entry to mid-range products, in the Indian plant. It’s not yet clear how many of these companies will use the Indian factories in order to build smartphones for the rest of the world, as in some cases the smartphones being built in the Indian factories are slightly different from those built for the rest of the world.