Xiaomi ties up with Foxconn to assemble smartphones in India

Visakhapatnam: Chinese smartphone maker Xiaomi Corp. on Monday became a high-profile addition to the list of global companies that are manufacturing in India in a potential boost to Prime Minister Narendra Modi’s flagship Make in India programme.

Xiaomi, the world’s second most valuable start-up, announced that Foxconn, the trade name for Hon Hai Precision Industry Co. Ltd., the world’s biggest contract manufacturer, has started assembling phones for it at a facility in Sri City, an industrial park in Chittoor district of Andhra Pradesh.

Foxconn will be assembling a new device, Redmi 2 Prime. Xiaomi expects the contract manufacturer to eventually build its entire range of phones in Sri City.

The facility will house a 100-metre assembly line that will put together phones with components imported initially from China. Over time, Hugo Barra, Xiaomi’s vice-president who oversees its global operations outside China, expects the electronics component ecosystem to be created in India.

“Our being here solves the chicken and egg problem of component ecosystem,” Barra said at a media briefing in Visakhapatnam, Andhra Pradesh’s biggest city. Barra expects chargers, batteries and the “much more complex” memory units to be manufactured in India.

Foxconn on Saturday said it would invest $5 billion in Maharashtra to create an electronics manufacturing hub over the next five years.

Pronounced Shiao-Me, Xiaomi is the seventh biggest smart phone maker globally, according to a May report by technology research firm Gartner Inc. It sells low- and mid-range smartphones under the Redmi and Mi brand names.

“We have chosen our highest volume product to manufacture locally,” Barra said on Monday.

Xiaomi has sold 3 million smartphones and tablets in India since July 2014 when it entered the country.

The company has no immediate plans for exporting the devices made in India, said Manu Kumar Jain, the head of Xiaomi Technology India Pvt. Ltd., the India unit of Xiaomi.

The Sri City unit will be Xiaomi’s second production facility outside its home base of China. It currently operates an assembly unit in Brazil. Like the India unit, the Brazil assembly facility also makes devices for the local market.

The company will only assemble phones at the facility. It has no immediate plans to make other products such as fitness bands or tablet devices in India, said Jain.

Company executives refused to disclose its investment in the plant, its capacity, or the number of employees at the facility. But Jain said workforce numbers at the unit are increasing on a “week-on-week basis; on a month-on-month basis”.

It will gradually ramp up capacity at the Sri City plant to its maximum capacity before thinking about setting up more units at other places, Jain added.

Marking a departure from its past strategy of flash sales, Xiaomi will sell the latest Redmi 2 Prime device in the open market. The phone will go on sale on Snapdeal, Flipkart and Amazon, Xiaomi’s online partners in India.

Priced Rs.6,999, the Redmi 2 Prime, which is being launched in India today, will go on sale between 2pm and 3pm. The phone is available outside India under a different name, the company said.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.