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Samsung opens world’s largest mobile phone factory in India: inside story

Samsung opened what is billed as the world’s largest mobile phone factory in India on Monday. Indian Prime Minister Narendra Modi and President of the Republic of Korea Moon Jae-in inaugurated the new cell phone manufacturing plant in Noida, Uttar Pradesh. The groundbreaking ceremony to mark the start of manufacturing of the new factory was also attended by Uttar Pradesh Chief Minister Yogi Adityanath, Minister of Trade and Industry Suresh Prabhu and executives senior executives at Samsung Electronics, including Vice President Jay Y. Lee, Vice President BK Yoon and, CEO and President of IT & Mobile Communications DJ Koh.

Samsung’s new facility, spread over 129,000 square meters, will help bolster PM Modi’s ambitious ‘Make in India’ initiative while meeting the company’s goal of making India a hub of business. export to the world. The new facility will go a long way to help Samsung meet the growing demand for its products and services across the country, while for the common man it would hopefully mean cheaper phones and other products and services in the future. the coming days.

“Our factory in Noida, the world’s largest mobile phone factory, is a symbol of Samsung’s strong commitment to India, and a shining example of the success of the government’s ‘Make in India’ program. Samsung is a partner in long term of India. We ‘Do in India “,” Do for India “and now we are going to” Do for the world “. We are aligned with government policies and will continue to seek their support to realize our dream of making India a global mobile phone export hub, ”HC Hong, CEO of Samsung India, said in a statement.

Samsung entered the Indian market in 1995 and has been a benchmark brand for mobile phones for buyers ever since. The company started manufacturing in India in 2007 and is one of the few global companies in the country to populate printed circuit boards (PCBs) since its inception and is also aligned with the goals of the Phased Manufacturing Program (PMP ) of the Indian government. It has two manufacturing plants in India, one in Noida and the other in Sriperumbudur, near Chennai. The planned expansion of the Noida plant is part of Samsung’s Rs 4,915 crore investment announced on June 7, 2017. The Noida plant was first set up in 1996.

Samsung entered the Indian market in 1995 and has been a benchmark brand for mobile phones for buyers ever since.

In addition, Samsung has five R&D centers and one design center in India. These are supported by a strong network of over 1.5 lakh retail outlets and 3,000 customer service points.

With its new facility in Noida, Samsung will apparently double its current mobile phone capacity from 68 million units per year to 120 million units per year, as part of a gradual expansion that will be completed by now. 2020. Samsung says it will use the facility. to make entry-level phones as well as high-end flagship phones like the Galaxy S9 and Galaxy S9 +.

The Indian smartphone market is a vast resource with untapped potential, and with Chinese players especially Xiaomi stepping up the stakes, expanding production in the country will be critical for Samsung to be competitive.

The heat is on

Xiaomi’s unwavering focus on markets outside of China – primarily India – propelled the company into the list of the top five global suppliers even as the global market shrank every year, for the first time in 2017, according to data published by the research firm IDC. Xiaomi is now the fourth largest smartphone company in the world, and India clearly has a lot to do with it.

Xiaomi managed to double its market share to 7 percent from 3.3 percent in the holiday quarter last year globally “even as” the brand continued to expand its presence in the commerce of retail by adding more preferred partners, launching new Mi stores and partnering with large-format retail stores in India. ” India, as a reminder, is the company’s second market after China. Its entry-level Redmi 5A, for example, saw over a million devices sold in a month.

Xiaomi also overtook Samsung’s sales in the last quarter of 2017 to become India’s top smartphone supplier, according to data released by two independent research companies.

While Counterpoint pegged Xiaomi’s smartphone market share in India at 25% in Q4 2017 based on shipments, ahead of Samsung’s 23%, Lenovo, Oppo and Vivo came behind, each with around 6%. market share. The research firm, however, ranked Samsung as the best seller of the year, with the South Korean company well ahead of Xiaomi in the first half of 2017.

Research firm Canalys said Xiaomi shipped 8.2 million smartphones in the fourth quarter of 2017, while Samsung shipped 7.3 million. The research company estimated Xiaomi’s smartphone market share in India at 27% in the fourth quarter of 2017, based on shipments exceeding 25% from Samsung.

Xiaomi is also speeding up domestic manufacturing. Earlier this year, he announced the opening of three more smartphone factories in India. The company, as a reminder, already has two and one that deals specifically with the manufacture of power banks. It has also started manufacturing smartphones at its power bank factory in partnership with Hipad Technology in Noida, Uttar Pradesh, resulting in a total of six smartphone manufacturing plants in India to date.

The three new smartphone factories, built in partnership with Foxconn, are located on campuses in Sri City, Andhra Pradesh and a new campus in Sriperumbudur, Tamil Nadu with a total campus area of ​​180 acres.

Competitors are moving closer now, which is actually a good thing as it would push Samsung in some ways as well.

Xiaomi also has an SMT (Surface Mount Technology) factory dedicated to the local manufacture of PCBA (Printed Circuit Board Assembly) units in Sriperumbudur, Tamil Nadu, in partnership with Foxconn. PCBAs are an essential part of a smartphone and make up up to 50% of a smartphone. The fact that Xiaomi will be making PCBAs locally in the coming days – in fact, the company says it has already started manufacturing – means that a critical part of all Xiaomi phones will be made locally in India. Xiaomi, as a reminder, locally manufactures – assembles – over 95% of its smartphones in India and in the future it looks like a larger internal portion of its smartphones will be manufactured – and not just assembled – in India, the country. .

The new factories will also result in increased production capacity of two smartphones per second – as opposed to the first smartphone per second – during operating hours, according to Xiaomi.

Aftermarket is a deciding factor when someone purchases a new smartphone or any other electronic device. Especially in India. It’s a bit of a disappointment when few brands are talking about the aftermarket as openly as they should. Samsung is a company that prides itself on its after-sales service. Another area where Xiaomi is getting closer is after-sales service, especially if you want to talk about how new the company is compared to the Indian market.

Xiaomi announced its 1,000th service center in Hyderabad in June this year, saying it is now able to resolve 95% of cases within 4 hours of repair. Xiaomi has service centers in more than 600 cities and has become the leader in after-sales service for customers, the company said, citing the date compiled by Red Quanta. The data is apparently based on interviews with 2,000 users from brands including Xiaomi, Samsung, Oppo, OnePlus, Lenovo and Motorola, Lava and Huawei spread across 32 cities and towns across India by Red Quanta.

India Advantage

Prime Minister Modi’s push for “Make in India” also involves the imposition of stricter rules on imported products, including higher tariffs, in categories such as mobile phones. Cell phones imported from outside India now incur a 20 percent customs fee. As a large part of cell phones are still manufactured outside of India, it is highly likely that their prices will increase. While this move is meant to give a major boost to local businesses, it will also likely encourage foreign companies to invest (more) in manufacturing in India. The same, according to the Modi government, will also give a big boost to the employment sector in India.

Companies like Samsung and Xiaomi, which manufacture their phones in India, will be less affected. India is a huge market, but also a market that remains price sensitive. The margin of error is therefore the bare minimum. There is a reason Xiaomi phones have achieved cult and fan status in India. They are ridiculously affordable. And they also offer great value for money. Something the late Samsung phones couldn’t generate. Samsung, which is the world’s largest mobile phone maker, has clearly taken customer demand – and also, to some extent, competitive strategy – and its latest decision to invest heavily in “Make in” into account. India “is proof of that.

Either way, Samsung enjoys a legendary history in India, and even now it’s up there when it comes to offline sales – and high-end flagships -. Competitors are moving closer now, which is actually a good thing as it would push Samsung in some ways as well. And, in the end, that would be India’s advantage. Because we all want good quality cell phones at affordable prices. Is not it ?

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