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Hon Hai Said in Talks over Smartphone Production for India's Bharti Airtel

Jul 28, 2015 | By Ken Liu

The Hon Hai Group of Taiwan and Bharti Airtel Ltd. are reportedly in talks over a deal to make smartphones for the latter amid news of Hon Hai Chairman Terry Guo having announced to build 10 to 12 factories in India by 2020.

According to news reports, Airtel, the No.1 Indian telecom service provider, plans to release its own brand of 4G smartphones priced between 4,000 and 12,000 rupees (between US$62.5 and US$187.5) in October or November this year in a bid to take on Reliance Jio Infocomm, Airtel's archrival in India planning to introduce its own brand of smartphones built on the LongTerm Evolution (LTE) 4G technology by the end of this year.

Rolling out India's first 4G service three years ago in Kolkaka, Airtel has reportedly approached Hon Hai over the contract manufacturing deal. However, Hon Hai has declined to comment on the reports.

Airtel has set up business ties with Hon Hai since June this year, when Softbank of Japan entered into alliance with Hon Hai and Airtel's holding company, Bharti Enterprise, to tap the Indian market of clean energies.

Report has it that Hon Hai, recognized as the world's No.1 contract manufacturer of electronics products, has begun manufacturing smartphones in India for Beijing Xiaomi Technology Co., the firm with the eponymous handset brand, and the American smartphone maker InFocus Corp.

Also reports are that Apple and Microsoft would contract Hon Hai to build iPhones and Microsoft Phones in India.

Hon Hai will reportedly invest approximately US$20 billion in India, where its manufacturing site in Andhra Pradesh occupies around 20,000 square feet, with plans to roll out 10,000 mobile phones per day with an estimated 10,000 workers. This site is considered the beachhead for Hon Hai's ambitious investment project in India.

Amid news report that Hon Hai is picking locations for its gigantic investment project with help from local Indian governments, Guo says his company's factories in India will create one million jobs once they are completed.

Industry executives point out Hon Hai's plan to open factories in India responds to Indian Prime Minster Narendra Modi's “Make in India” plan announced September 2014 and can spread the company's risk of over concentrating manufacturing activities in mainland China.

Most of all, India is projected by market consultancy Strategy Analytics to overtake America as the world's No.2 smartphone market by 2017, trailing only mainland China, with market size growing at an estimated double-digit rate annually from 2015 to 2017.

An estimated 120 million smartphones will be shipped in India this year alone, up from only 82 million in 2014. Such optimistic outlook has drawn international smartphone heavyweights like Samsung to open factories or seek contract manufacturers in India. 


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