India is one of the world's fastest growing smartphone markets and is set to overtake the United States of America by 2018, becoming the world's second largest smartphone market, behind China. Because of the significant potential for smartphone sales growth, a large number of the world's manufacturers are seeking to sell into the Indian market and helped by the Indian government's "Buy India" policy, many are seeking to invest into Indian factories, producing smartphones for the local market. We have already seen several of the larger Chinese manufacturers starting to develop Indian factories, such as Xiaomi, and now we have confirmation that Japanese business, Panasonic, are looking to expand their Indian smartphone activities. Panasonic already sell a number of products into the Indian market and are looking to increase revenues by selling smartphones into India.
Panasonic's current business generated Rs. 700 crores (7 billion in western terms, around $109 million) but the business is reported to be on track to increase this to Rs. 2000 crores, around $312 million, by the end of the year. Manish Sharma, Panasonic's India business' managing director, said, "We are looking at a growth of 25 percent in the handset business this year and a growth of 35 percent at the end of the next year." One of Panasonic's core Indian businesses is selling air conditioning units but unfortunately this has been a victim of India's emerging and underdeveloped power infrastructure that sees the smaller cities without continuous electrical power, which reduces the appeal of air conditioning. Panasonic's air conditioning business is also struggling because consumer finance is less readily available as there is only one finance business able to provide comprehensive schemes: Panasonic need more finance companies to enter the market in order to increase sales.
In order to help Panasonic's smartphone sales, the Japanese electronics business is in discussions with local business, Jaina Marketing. Jaina are the manufacturer of India's Karbonn smartphones and is responsible for Panasonic's Android device marketing and distribution, plus customer service and support. Furthermore, Panasonic have stated that they are considering investing in a plant to manufacture the devices locally, tapping into "Buy India" – the business is still investigating possible locations for a factory. It has said, however, that smartphones produced in India will be solely for the local market rather than being sold overseas.