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Samsung starts assembly of flagship smartphones in India in 2023

South Korean giant Samsung has shifted its interest in the Indian markets. The largest smartphone industry has started making its fold and flip smartphones as well as its latest Galaxy S23 flagship smartphones in India. The decision has renewed the focus on the integral smartphone market which has been immersed by the massive sales of Chinese competitor smartphones such as Xiaomi.

Samsung’s Indian unit previously used to import some of its fold and flip devices in the world’s second-largest smartphone market, but now Samsung has shifted to India to diversify its smartphone portfolio, as stated by Raju Pullan, the head of Samsung’s smartphone business in India.

Pullan has further added that the initiative has resulted in a strong commitment between Samsung and the expanding Indian market. However, he has yet to disclose if the locally manufactured smartphones will be cheaper compared to the imported ones.

Samsung, the South Korean giant, has faced severe threats from Chinese competitors concerning the user-friendly prices of the devices in the Indian market. Xiaomi, the largest Chinese smartphone corporation, was the largest vendor of smartphones in India in 2022. The company has expanded significantly, attaining a market share of 20 percent, while the market share of Samsung was close to 19 percent.

The data has been shared by a research firm named Canalys.

The main reason by which the Chinese manufacturers exerted dominance in the Indian market was mainly because of their lower prices, high battery capacity, and marketing promotion based on Cricket and Bollywood: the two most important aspects of India to drive the sentiments of the customers.

Samsung specializes in higher-end smartphones and has been slow to learn the trends, but, at present, the company has shifted to launching an affordable range of smartphones, collaborating with banks to provide exuberant credit card offers and initiating a customer credit program that helped the company to achieve sales accounting for 1 billion USD in 2022.

Samsung is following the same trajectory as its rival Apple and has participated in Prime Minister Narendra Modi’s manufacturing drive. The initiative aims to transform India into an export hub. However, Samsung has shared its part of the struggles of achieving assistance from the Modi government, like financial incentives, which have been provided to its rivals- Foxconn Technology which is associated with the manufacturing of Apple devices.

Recently, the South Korean giant has made it to the spotlight by announcing the launch of the Galaxy s23 line- one of the strong competitors of the iPhone. Samsung has revealed that they have already received nearly 140,000 units which accounts for 169 million in the last 24 hours after the device’s launch. 

Samsung

The record has broken the sales of the previous smartphones in the galaxy series as it has achieved to gain double the orders in a single day,

The company is further increasing the number of outlets where it sells Galaxy devices and is investing more in marketing and sale of the device.

Pullan has further revealed that the company has set up a mobile research center in India without diving deep into the matter followed by the increasing production base in the country.

Why are major smartphone companies, including Samsung and Apple, establishing their production units in India?

India has a comparably large market than other countries provided with the low cost of manufacturing. The cost of labor is cheaper in India compared to the developed nations implying that the companies can save a lot of funds by establishing their production bases in India.

India has a large market with a significantly large population of the middle class and upper class, thus providing a large market for many products.

Apple Inc. has recently accelerated its intentions to relocate some of its production facilities outside China. China has played a crucial role in the supply chain and has earned the title of the largest smartphone manufacturer in the world.

Apple has already ordered its suppliers to begin actively planning for the assembly of Apple devices in other Asian countries. The corporation stated that Vietnam and India have taken prominence. This will lessen reliance on Foxconn Technology Group’s Taiwanese assembly facilities.

China is still working to stop outbreaks through preventative measures like zero covid approaches three years after the Covid-19 pandemic began. However, many other nations have reverted to their pre-pandemic states.

Demonstrators in China have been protesting and denouncing President Xi Jinping’s policy of imposing a state of emergency.

This is supported by five years of escalating military and economic tensions between the United States and China that were brought on by the Trump and Biden administrations.

In the long run, Apple wants to produce 40 to 45 percent of its iPhones in India. An analyst at TF International Securities who monitors the supply chain claims that India currently only has a few manufacturing facilities.

The right time to set up production bases in India is ‘now’:

India's Budget 2023

Moreover, Budget 2023 has shed light on the infrastructure and the investment sector. Finance Minister Nirmala Sitharaman has stated that investments in the infrastructure and enhancement of the production capacity will be beneficial in driving growth and employment. After the extended impact of the pandemic, private investments are surging again. The Budget will ramp up the generation of employment opportunities.

Edited by Prakriti Arora

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