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Asus, Foxconn team up to make smartphones in India

Posted: 02 Oct 2015 ?? ?Print Version ?Bookmark and Share

Keywords:smartphone? contract manufacturing? Zenfone? Make in India?

Taiwanese phone maker Asustek Computers (Asus) has partnered with Foxconn to manufacture 1.5 million smartphones a month in India, Economic Times reported.

This will comprise about 80 per cent of sales in India, with the first batch of about 20,000 phones to be sold in the next few days. Asus will follow a contract manufacturing model, but it will invest at least $5 million in marketing, said Peter Chang, Asus India country manager.

"India offers us a huge opportunity as smartphone penetration is just 10 per cent. Our local facility will cater to the growing demands of the market," he said in a statement.

The company recently launched three products (Zenfone 2 Laser, Zenfone 2 Deluxe and Zenfone Selfie) in the Indian market, which is expected to overtake the United States to become the world's second largest market by 2017, selling some 174 million units, according to Strategy Analytics. In the April-June period alone, shipments rose 44 per cent to 26.5 million units, according to IDC.

Asus aims to increase its revenue in the country from $120 million in 2014 to $200 million this year and to take a 5-per cent market share by the end of 2016. The company's smartphone portfolio contributed 50 per cent of its annual revenue, which is followed by laptops at 40 per cent.

The Taiwanese company plans to make the phones available online and offline as it integrates smartphone retail with its exclusive stores that sell laptops.

Apart from Asus, Chinese smartphone maker Xiaomi also partnered with Foxconn to manufacture handsets in India in order to reduce production costs and speed up time to market as it tries to benefit from the country's huge consumer base. Xiaomi, however, did not disclose investment details. It also did not specify the capacity or number of employees to be hired at the unit.

Foxconn, an electronics contract manufacturer that is also based in Taiwan, returned to India with a $5-billion investment after it shut down its manufacturing facility in Chennai when Nokia decided to move out of the country.

Motorola and Gionee have also started assembling their smartphones in India, where the government pushes for the Make in India campaign to boost local manufacturing and attract foreign investors.

- Stephen Padilla

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