Asus partners Foxconn to make smartphones in India

In a move to strengthen its presence in the fast-growing yet competitive market, the Taiwanese smartphone maker Asustek Computers announced that it has partnered with Foxconn to begin local manufacturing of smartphones in Sri City in Andhra Pradesh.

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 excited to announce our local manufacturing facility that will cater to the growing demands of the market," he told ET.

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%.

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.

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.

Image credit: Indiatimes