Tuesday, 26 June 2007

Gartner Says Mobile Phone Manufacturing Growing in India

Fuelled by a growing market and low cost manufacturing, India’s mobile phone production has grown, a Gartner report has said.

Mobile phone manufacturing finally came to India in 2005 and before that handset makers served the market by importing handsets from Korea, Taiwan and China. Last year, India produced nearly 31 million mobile phones, valued at about USD5 billion, the Gartner report said. The research firm expects production volumes to reach nearly 95 million and to register a compound annual growth rate of 25 per cent between 2006 and 2011.

Growth in handset production in India this year, at 68 per cent by units and 65 per cent by value, is forecast to be the highest in the Asia-Pacific region, Gartner said.

Mobile phone manufacturing was the largest contributor to the country's overall electronics production revenue last year, and to the total available market for semiconductors, Gartner said.

India is the world’s fastest growing mobile market. It added 6.57 million mobile subscribers in May this year, taking the total number of subscribers to 178 million. The country added 6.11 million new mobile subscribers in April.

Finnish contract manufacturer elcoteq was the first company to set up a telecoms manufacturing unit in Bnagalore in April 205, followed by Korean rivals LG and Samsung. Another Finland based handset manufacturer Nokia, the world’s biggest maker both by volumes and revenues set up a plant near Chennai (Madras) in 2006 and now is the biggest maker of handsets in India. It also exports handsets made in India to Gulf and Africa. Sony Ericsson is outsourcing mobile phone manufacturing to the operations in Chennai of Flextronics and Hon Hai Precision Industry of Taiwan.

There are only a few local branded phone vendors and manufacturers such as Spice, Usha Lexus, and BPL that are either manufacturing locally or import the handsets.

Gartner also said while the top five handset makers worldwide will retain a major share of production volume, local manufacturers are expected to capture up to a fifth of India's overall mobile phone production volume by the end of 2011. Growing demand for low-cost and ultra-low-cost mobile phones, and the need for EMS (electronics manufacturing services) vendors to reduce their revenue exposure to large multinational vendors, will contribute to the growth of local-brand mobile phones in the Indian market, it added.