Asia News Aug 18

Samsung aims to expand its India phone portfolio

South Korean giant wants to make $40 billion worth of handsets over next five years

Samsung aims to expand its India phone portfolio
 The Samsung Opera House in Bangalore on September 11, 2018. Photo: AFP

In a likely boost to India’s prospects as a global smartphone manufacturing hub, Samsung aims to partly shift its production to the country from Vietnam and other nations. 

The South Korean electronics giant is finalizing plans to produce over US$40 billion worth of smartphones in India over the next five years, with a major chunk meant for exports, Economic Times reports, quoting sources.

Samsung, along with 21 companies, including Foxconn, Wistron and Pegatron (the contract manufacturers for Apple devices), have registered for the production-linked incentive scheme formulated by the Indian government. 

Under the scheme, the government offers a production-linked incentive to boost domestic manufacturing and attract large investments in mobile phone manufacturing and specified electronic components, including assembly, testing, marking and packaging units.

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Information Technology Minister Ravi Shankar Prasad had earlier said that under this scheme 22 companies will manufacture mobile phones and components worth 11.5 trillion rupees ($154 billion) over the next five years, out of which products worth 7 trillion rupees will be exported.

Samsung currently has its largest mobile phone manufacturing unit in Noida, near New Delhi, and it also exports to other markets. It manufactures roughly 50% of its phones in Vietnam and is cutting down its manufacturing in South Korea due to high labor costs.

It had last year shut its last smartphone factory in China and is in the process of winding up its remaining facilities, including two semiconductor manufacturing sites in Suzhou and Xi’an.

Sales surge

Samsung regained its second spot in the Indian market and its sales reached a two-year high in the second quarter on the back of anti-China sentiment following the Sino-Indian border clashes. Samsung garnered a market share of 26%, next only to Xiaomi (29%), according to research firm Counterpoint.

In the March quarter, its was in the third position with 16% market share. Over the last three years it had lost ground to Chinese handset makers. Samsung has strengthened its supply network and its online presence, as more and more people in India are trying to avoid store visits in the wake of the Covid-19 pandemic.