Why are cell phones not made in India
If only it weren't for people, one could produce so beautifully and maximize profits. On the other hand, people are also consumers, and nowhere else can you feel this as clearly as in India at the moment. So reported the seated in Mumbai Economic Times last week under the heading "globalized anger" over employees of the Taiwanese manufacturer Wistron who dismantled their factory in Karnataka, India after their wages were arbitrarily cut. Wistron manufactures components for iPhones in India.
The uprising comes at a very inopportune time, as a race for shares in the gigantic market with over a billion potential customers has broken out in India. Triggered by border conflicts in the Himalayas, the government in Delhi decided in March 2020 to strive for a so-called decoupling of the Indian and Chinese markets. As early as April, the ruling "Bharatiya Janata Party" (BJP) launched the "Production Linked Incentive" (PLI), and the program can be translated as "Production Linked Incentive". It is intended to promote local production chains and affects, among other things, the areas of mobile communications, pharmaceuticals, automobiles, batteries, textiles, nutrition, solar products and steel.
Smartphones are of particular importance because India is not only a manufacturer, but also a mobile communications market of 1.3 billion people, the second largest in the world - after China. According to estimates, around 760 million Indians will have a smartphone in the coming year with which they can not only make phone calls, but also play, chat, shop, go online and process their payment transactions.
The future market of mobile communication is particularly suitable for trade wars
Ravi Shankar Prasad, who as minister for the BJP is responsible for "electronics, information technology and communication", said at the beginning of December at the annual general assembly of the chambers of industry and commerce, which was held via video conference: "We wanted India becomes the second largest mobile device manufacturer in the world - now I want to push India to overtake China. " The future market of mobile communication is particularly suitable for trade wars. After the border dispute escalated in the summer, India blocked over 200 Chinese apps, including the popular social media service "Tiktok" and the messenger "Wechat". Since then, Indian teenagers have had to use the apps of their US competitors. In October, Prasad's ministry approved 16 suitable high-tech industry applicants for the PLI funding scheme to rapidly increase the proportion of electronics products "Made in India". On the one hand, this encourages companies like Samsung (South Korea), Foxconn, Wistron and Pegatron (all Taiwan) to produce in India. Indian smartphone manufacturers such as Lava, Bhagwati, Padget Eletronics, UTL, Neolyncs and Optiemus Electronics are also expected to grow - and if the ministry has its way, they will become "national champions" in smartphone production.
In the third quarter of 2020, smartphone sales in India grew by eight percent, 50 million devices were sold in this period alone, a new record, also due to the corona pandemic. The market leader Xiaomi sold around 13.1 million smartphones, Samsung 10.2 million, Vivo 8.8 million, Realme 8.7, Oppo 6.1 million. With the exception of Samsung, all of these manufacturers are Chinese. During this time, 36.7 million devices were imported from China, although a government campaign has been running since the summer calling on Indians to stop buying Chinese products, tweeting against Chinese companies on social media and protesting in front of factory gates. The total market share of Chinese smartphones in India still grew from 74 percent in 2019 to 76 percent.
iPhones are too expensive for most of the Indians
The fact that Apple does not appear in this ranking, although iPhones are produced at several locations in India, and that the front runners are again hardly known in Germany, has the same reason: iPhones are luxury devices that hardly play a role in the Indian mass market play. Apple has started a market offensive and opened at least one online shop in India, punctually before the Hindu Festival of Lights in November, which consumer behavior can definitely be compared to the Christian Christmas. But iPhones remain in the same segment as Porsche and Rolex. Apple and Samsung are trying to establish more expensive branded products, but according to market research by the International Data Group from last year, Indians mainly buy cheap to medium-priced devices. The average purchase price for a smartphone in 2019 was the equivalent of 159 dollars, the price segment below 200 dollars covered 78 percent of the Indian market.
The competition is also fierce among telecommunications providers. According to a report by the BBC, there is hardly any other country where you can load mobile data cheaper than in India. A gigabyte costs around $ 0.26 here - the global average price is $ 8.53. Smartphones and mobile network providers are in tough competition, which is why people in India often switch providers and buy a better smartphone when the old one is only six months old. This is not nice from an environmental point of view, but the economy benefits from it. You can always sell new smartphones to the 760 million and more potential customers, the market is not saturated that quickly. For this reason, too, the government is now trying to meet domestic demand with a domestic supply, on the one hand to promote high-tech domestically, but on the other hand in order not to leave the profits and know-how to the oversized neighbors. On December 16, Ravi Shankar Prasad went one step further on the TV station NDTV: "In order to guarantee a production chain with integrity, the government will soon publish a list of trustworthy sources and products". Chinese manufacturers will presumably not be found on it.
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