Asus to make smartphones in India; partners Foxconn

NEW DELHI: Taiwanese smartphone maker Asustek Computers said it has partnered with Foxconn to begin local manufacturing of smartphones in Sri City in Andhra Pradesh, a move that will help it strengthen its presence in the fast growing but extremely competitive Indian smartphone market.

The company, which has kickstarted manufacturing operations with Zenfone 2 Laser followed by ZenFone Go, aims to manufacture 1.5 lakh smartphones a month by the end of the current financial year.

This will account for almost 80 per cent of sales in India. Asus India Country Manager (System Business Group) Peter Chang said that the company itself was not investing as much in manufacturing as it was following a contact manufacturing model. However, Asus will invest a little over $5 million in marketing its Make in India play. The first lot of about 20,000 phones will be sold in the coming days.

“India offers us a huge opportunity as smartphone penetration is just 10 per cent. We are excited to announce our local manufacturing facility that will cater to the growing demands of the market,” he said.

The company is targeting a 5% market share by end of next year and expects revenue from India to rise to $200 million in its financial year ending December 2015, from $120 million in 2014. Smartphone contributed 50% to annual revenue, followed by laptops at 40%.

India, one of the fastest growing smartphone markets globally, is poised to overtake the US as the second-largest market in next few years. Shipments in India grew 44 per cent to 26.5 million units in April-June, says the data by research firm IDC.

Also, over the past few months, global smartphone makers like Xiaomi, Motorola and Gionee have commenced assembling their handsets in India, where the government is pushing local manufacturing through its 'Make in India' initiative.

“It is an opportune time to make the announcement as it will enable us to bring our cutting edge products to consumers who are looking for features and design sensibilities of a high-end smartphone at an economic price,” he said.

The phones will be sold online and offline in future, as Asus plans to integrate smartphone retail with its existing exclusive stores that sell laptops.