Last updated on November 1st, 2020 at 12:00 pm
Why can’t India manufacture mobile phones? Updates in 2020?
Most of the people in India are only interested in getting an Indian made mobile but they don’t get it. So, these people think why can’t India manufacture mobile phones? Hence I decided that what I really need to write on the topic for my people.
I always wanted to give only positive things about India but I fail when it comes to smartphones.
Apart from that, as an Indian, I never leave hope and trust in my country.
In fact, with the passage of time, India is also changing and this change is getting better.
Without wasting much time, we will now turn to the main topic.
Why can’t India manufacture mobile phones?
Let’s see some basic facts,
Firstly, India is always looking at software and not hardware or manufacturing sector.
Secondly, our country only assembles mobile phones by importing components from other countries.
Lastly, we have never received any financial help from the government to make research and development, chip manufacturing and component manufacturing, etc.
But don’t worry, it’s not the end. Micromax and Lava are coming back in 2020/21.
Also, they don’t just want to come, they want to set base in the market. Most importantly, this time their strength and thinking ability is very different.
Now we are going to understand the whole information about mobile manufacturing in India.
1) Important factors required to manufacture mobile phones:
- Chip manufacturing unit
- Display and panels
- Manufacturing industry
- Research and development unit
- Advance Plastic industries
# Chip manufacturing unit:
Chip is the most important component required for mobile.
What is the role and function of a chip?
The chip acts as the brain of the mobile and also handling the ongoing process.
How to make a chip and what materials it takes?
A chip can be made by using the following material,
- silicon rectangle
It is also necessary to have a litho machine for making the chip.
But this machine requires a lot of investment and it is not suitable for everyone.
Almost a single litho machine costs approx 90 million dollars and it cost a lot.
Which countries have its own chip?
The following countries have chip manufacturing such as
1. Samsung- Exynos
2. Taiwanese- MediaTek
3. China- Qualcomm, hisilicon
4. America- Apple a30 bionic
Are you searching for India in it?
In fact, India does not have a single machine and manufacturing unit. Why? I will explain the reasons afterward’s.
# Display and panels:
Samsung is producing a large number of displays. In this case, their name comes to the fore.
Similarly, the rest of the companies also make it like LG, tianma, Japan display Inc, sharp, Foxconn, etc.
Does India have its display manufacturing like Samsung, LG?
No, unfortunately, we import it from cheap nation china.
Things are changing now and Samsung is now preparing to make its first display company in India.
# Manufacturing industry:
Indian only assembles parts which we import from china or foreign countries.
If we want a product made in India, we have to build a manufacturing unit first.
However, there is a difference between manufacturing and assembling of the Smartphone.
In manufacturing, the parts required for the mobile are made.
On the other hand, in assembly, they joined together.
In conclusion, India needs to have a manufacturing unit along with the assembly unit.
# Research and development units:
We need an R&D center to bring in new ideas and technologies.
The research and development center puts your space at the top and helps you overcome competitors.
With the help of the center, new advanced technologies can be brought. Therefore, by recognizing the demand of the people, the competitor can be excluded from the competition.
How many R&D centers are there in India?
Unfortunately, India doesn’t have any research and development center. There were many reasons behind this like financial, government support, lack of technologies, skill labor, etc.
As I move forward, I will tell you all this in-depth.
# Advance plastic industry:
No doubt India produces plastic but not an advance one.
In simple words, advance means quality, well designed, critical shapes production, etc.
What is the need for quality plastic? Only this type of plastic is used for mobiles.
Meanwhile, our industry has never wanted to make this plastic.
2) Reasons (why can’t india manufacture mobile phones):
# Financial problems to manufacture mobile phones in India :
It takes a lot of investment to make a chip as mentioned above.
Most importantly, a single machine cost 90 million dollars. In fact, you can buy a jet for the same amount of money.
So how many machines are there in India? Unfortunately, we haven’t bought a single machine yet.
Why India didn’t take a litho machine?
There are many reasons for this. One of the main reasons is that the government and the mobile manufacturing companies neglected the development of the electronic sector.
Also, when Micromax, Lava companies are making a profit so they never wanted to buy a machine and develop themselves. And yes, the government also was not supporting them at that time.
On the other hand, China had invested around 5000 million dollars to buy only 40-50 litho machines. Not only that, they set up 10 factories in this field.
Since then, we know very well what has been going on, in the smartphone industry so far.
# Lack of components and infrastructure:
We have a large capacity for Assembling Smartphone as compared to china.
In 2017, India was the second-largest maker of smartphones. Further, I would like to say that we have retained the same position in 2020.
Then what exactly is our problem?
The first important point is that we do not have the necessary parts to make a mobile. If you look at the past, you will understand that Indian mobile companies were only dependent on other countries.
As you can see, the lack of money was not the only problem, but the small intellect and small thinking of these companies were a part of it.
They give zero priority to developing companies and that is why we see the problem today.
Similarly, Infrastructures also play an equally important role.
# Things that we never thought about manufacture mobile phones in india:
Factors that Samsung made successful in the mobile industry:
Samsung is the top leading brand in the world and almost ruling the Smartphone industry.
1. Samsung has been keeping a close eye on the mobile industry from the very beginning.
2. They constantly survey what the customer wants and give them right away.
3. Always try to give new features on a low budget.
4. High investment and high profit is their mainstay.
5. They spread their brand and their advertising all over the world.
6. Samsung benefited from his own display and panel making unit.
7. It has its own microprocessor chip called Exynos.
8. They already knew how important a research and development center would be in the future. Hence, they put so much emphasis on the R&D center.
Further, samsung had already started the plant in India. Similarly, they are now investing around $500 million in a new manufacturing plant.
Factors that china made successful in the mobile industry:
Most frequently asked question on internet, why can’t India manufacture mobile phones like china?
1) China Invested billions of dollars in the R&D center. Further, they developed technologies similar to that of foreign countries thought about.
2) China was able to make a lot of mobiles only and only because of the chip manufacturing machines. All these mobiles are used all over the world. Moreover, China has invested billions of dollars in Xiaomi (Mi), Vivo, Oppo.
3) They have the supply chain ecosystem and all the parts needed for mobile. That’s why they sell mobiles at low prices.
4) In China, the government does its best to help people who do business by providing water, electricity, labor, etc.
5) Similarly, large scale production and low-wage workers benefit them.
6) Foxconn, which makes a name for itself in the manufacturing world, is China’s partner.
Foxconn is now also India’s partner, so India will not be left behind.
# Lack of R&D center:
I have already told you about the importance of the R&D center.
So, the mobile industry can do nothing without an R&D center.
Our Government and electronic industries never thought about making an R&D center.
Hence, the repercussions of all this are still being felt by our Smartphone industry.
3) Why Indian mobile companies fail?
Why Indian Smartphone brand failed?
Mobile brands in India failed because they were only looking for profit. They never emphasized development and technology.
So, they have been suffering the consequences for the last seven years.
With the new 4g and lower prices, China has pushed Indian companies out of the market since 2014.
As a result of this, Indian companies like Micromax, lava, Karbon lose their market after 2014 in India.
On the other hand, China is still making progress day by day in Smartphone industry and making it difficult for companies in India.
The basic history of Indian mobile companies:
Before 2015, only Micromax and lava were well-known companies in India.
In 2014, Micromax was the number one brand in India. Moreover, they had the highest revenue of Rs 10,000 crore during the year 2014-15. On the other hand, Lava Mobile was also making good progress.
At that time, if anyone wants to buy a mobile, then the name Micromax used to be the first. So, you must have wondered how these companies failed with such a big name and reputation.
Hence, I will explain the reasons behind this to allay your doubts.
Let’s see, why Micromax mobile failed? And why lava mobile failed?
Both companies have same reasons which I will explain below.
# Failed to upgrade 4G and android version:
Micromax used to import parts from China to make mobile and rebrand it. Further, sell them in India. But when the 4G announcement was made, it was a big and bad turning point for our companies.
At the same time, Chinese company Xiaomi launched a new 4G and Android mobile. Further, Due to its low price and good features, it got immediate publicity.
Similarly, moto G mobile handset launched with new 4G and android. This mobile with pure android had a competitive price and also worked smoothly without any lag. As a result, it was well-received by the market and sold well.
On the other hand, Micromax couldn’t do anything right away and stayed in the market on its old mobiles.
When Micromax got stuck with 4G and Android, Chinese companies went a long way.
Micromax did not have an R&D center so they could not understand the demand in the market.
# ‘ZERO’ investment for innovation:
Investment in technology and development is the most important point for any industry.
The annual revenue from the sale of Micromax mobiles was around Rs 10,000 crore.
However, Micromax did not want to set up an R&D center and invest in it.
Most importantly, they did not even think of setting up a small manufacturing unit.
No doubt Micromax was at the top of the mobile industry, but lagged behind due to lack of development.
Hence, they failed to understand the threats that competitors bought in.
# Not interested in chip manufacturing:
As I told chip is the most important component in mobile. Unless you have a chip don’t think of making mobile.
But our companies busy with only imports and making lots of profit.
Having a chip means you could make pure made in India mobile.
As usual, they did not want to invest in it.
# Focused only on import (dependent on china):
At that time, Micromax was happy with what they have but didn’t realize it’s not enough to stay in front of a competitor.
Micromax got ruined because of a bad habit of copying and rebranding. I think that was the main reason for Micromax failure.
If the foundation of any business is based solely on imports, it will be destroyed in the future.
So, the same thing happened with Micromax.
# Wrong profit investment:
I always believe growing with business ideas fairly simple. But keeping a position at the top with new technology and development is very difficult.
Customers are the key to any business. Therefore, it is important to provide good quality and service to retain them.
Hence, it is beneficial to survey the market and know the needs of the people.
However, Micromax did not pay attention to this and also not invested in it. Instead, they focus only on advertising, and this mistake got worse in the future.
Because any business will benefit from advertising but if you want to last a long time, the only option is to maintain quality.
This is all about the wrong investment.
# Never thought about OEM and ODM:
OEM means original equipment manufacturer and ODM means original design manufacture.
If Micromax had invested in OEM and ODM then they definitely stand strong in the market. Also, dependency on China may have reduced for sure.
# Poor quality and after sell service:
Poor quality in design, hardware, and software fall down their position in the Smartphone industry.
At the same time, it was mandatory to provide after sell service to the customer.
After sell service makes your product successful itself.
But in the case of Micromax,
If the mobile went bad, the customer would have to throw it away as the service was not good.
They didn’t care for after sale services and customer relationship.
You may have heard about their services from a friend or relatives.
Of course, the companies failed to provide after sell services.
Hence, Micromax had to deal with bad publicity, bad reviews, bad feedback and ratings.
Keep in mind that I am talking about what Indian companies did? Because last three to four years things have changed in Indian electronic industry.
I don’t like to talk about these old negative things about India but it is our topic so I was cured.
4) What happened to Micromax, lava? and what efforts Indian companies taking to manufacture mobile phones in india 2020?
Micromax and lava are only Indian Smartphone Companies that can overtake the Chinese brands.
Not only that, they have the potential to capture the entire market in India.
What happened to Indian mobile brands?
# Micromax making comeback to manufacture mobile phones in India:
The most commonly asked question, is Micromax still alive in 2020?
Yes, Micromax still alive. This time around, Micromax is not only alive but ready for a boom in the Indian market.
Some basic history and current updates of Micromax:
Past few months of Micromax:
Before 2014, Micromax using almost 80 % material of china. After that, Micromax launched a new mobile phone called ione note in 2019. Since then not a single mobile has been launched till now.
Further, Micromax teasing about the new launch on twitter handle.
Co-founder Sharma said that “We’re working hard internally and soon we will come up with something big. Stay tuned!”.
“Micromax new models will be made thorough modern look and budget-friendly” Also added further.
They are expecting to launch made in India mobile may be in 2020/21. They want to start as early as possible the new manufacturing of mobile phones in India.
Following things Micromax doing in 2020:
1. New R&D center:
Micromax realizes the importance of the R&D center and decided to start it.
Hence, they are investing around Rs 500 crore for the R&D center. This time Micromax got government support through PLI (productive linked incentive) scheme.
Rahul Sharma said, “the government scheme will be helpful to compete with china on the pricing front”.
2. Working on features and pricing:
They are not reviling anything about price and features. But overall, we can guess that it will bring in a mobile with a budget between 10k-15k.
Considering that people in India always prefer mid-range mobiles, they will launch three budget-friendly mobiles.
3. Reducing import from china:
Rahul Sharma said, “we are going to use 50-60% Indian material”.
In the future, of course, they will gradually reduce imports and launch Pure Made in India Mobile.
4. Focusing on making pure Indian mobile:
we all know the R&D center is about to start but I have heard somewhere that they are going to start manufacturing unit too.
Hence, there is no doubt that they will make a complete made in India mobile.
# Steps of lava to manufacture mobile phones in india:
Don’t ignore the lava because they have not only survived the last five years but are also making new progress.
Moreover, Lava company’s plans are better than any other company. Hence, lava is constantly working on it.
Lava in last five year:
Lava company export over 32 % of mobile phones to markets such as Mexico, Africa, and Asia.
They have sold almost 110 billion mobile handsets for the last five years.
It has so much potential that it can stand out as a competitor in the Smartphone market.
Lava mobiles between Rs 5,000 and 6,000 are still doing well in the market.
Lava Indian mobile company in 2020:
The company owns a Surface Mount Technology unit. They are moving towards creating PCBA (Printed Circuit Board Assembly) parts locally with full focus and this is an important part of any mobile.
Ever since the government launched the Vocal for Local and PLI scheme, Lava has decided to shift the entire R&D department and manufacturing unit from China to India.
Hari om rai (lava managing director) said, “with the government support (PLI scheme), our manufacturing disabilities for world market would be largely met hence we plan to make this shift”.
Subsequently, Lava will invest a total of Rs 800 crore in the next few years in india.
Also, lava has now invested Rs 80 crore in India and reopened its plant in Noida.
The plant will have 20% production at present and for this, they have hired 600 employees.
Further, they will now work for a price range segment of 10k to15k.
5) Government initiatives to manufacture mobile phones in India 2020:
Government support plays an important role in any industry. Our government understands that progress in the field of electronics is the most important.
Hence, the government has come up with schemes for industries like smartphones, electronics, electric component manufacturing, etc.
Let’s talk about how government schemes support mobile phone components manufacturing in India?
The following initiatives are taken by the government:
1) Productive linked incentive scheme (PLI):
2) Atmanirbhar bharat vision:
3) Make in India:
According to the ministry of electronics, the electronic sector suffers a disability of around 8.5 % to 11% on account of many reasons (which I already explained above).
So the government introduced a PLI scheme to eliminate this.
Seeing all this, the Ministry of electronics decided that now there is a need to bring India into the global market in this field.
In this scheme, an incentive extends from 4% to 6% on incremental sales of goods manufactured in India.
The main policy of SCHEME is to support the industries which manufacture electronic parts, mobile parts and electric parts, etc.
# Atmanirbhar Bharat vision:
The government agenda is clear now that it will bring more local businesses to the forefront.
Now the government is interpreting the word “vocal for local” in the true sense.
Not only that, they realized that if we make products in our country, Chinese imports can be reduced.
Therefore, Indian companies now come up with positive things because of these schemes.
The main strategy of atmanirbhar vision to make india self-reliant and self-sufficient.
So these SCHEMEs will continue to help companies in India and that will definitely make their progress.
# Make in India scheme to manufacture mobile phones:
Foreign countries have invested under the Make in India scheme and India is benefiting from it.
Companies like Samsung, Nokia, and apple have made investments and are still doing so.
For your information, Samsung has recently invested Rs 500 crore in-displays making, which could help Indian companies reduce Chinese imports in the future.
If such alternatives continue to emerge, India will definitely be less dependent on China.
Therefore, make in India is also becoming a good scheme and the benefits will definitely be seen later.
Now, We have some line of hope about mobile manufacturing in India. So, let me know in a comment what do you think about it?