Indian Smartphone Makers to Aid US Telecom to Produce Budget Phones

Renowned US telecom operators are planning to turn towards India to manufacture cost-effective mobile phones. The Indian handset makers such as Lava and Micromax has got an opportunity to acquire millions of dollars’ worth of contract-manufacturing orders.

Furthermore, the brands such as Verizon, T-Mobile, and Cricket Wireless (a sub-brand of AT&T) are in talks with Indian smartphone makers that include Micromax and Lava, to obtain unbranded handsets that would be bundled with data subscription contracts in the US. Rahul Sharma, Co-Founder, Micromax, says, “Vietnam and India are emerging as contract-manufacturing hubs outside China, and Indian companies are well placed to produce such devices for the American market.”

The US telcos’ are trying to fill the void created by the China brands. Thus, the US is also urging its associates to avoid using the Chinese telecom equipment as the globally largest economy resists China’s control in the strategic industry. However, the telecom service providers in the US have typically secured almost all the low to mid-end mobile devices from Chinese companies like ZTE and TCL. The aggregating enquiry on Chinese telecom gear has, however, prompted them to look at other options.

S.N. Rai, Co-Founder, Lava states, “While the shift started some time ago, the trend has become far more prominent in the past few months with the volume of enquiries steadily picking up. If the deals work out, it could be nearly Rs. 2,000 crore per year opportunity for the company in the near term. We have relevance in the entry-level segment because we have good confidence in the supply chain. Brands like Samsung and LG are making a killing in the high-end segment because of the ban on Chinese smartphone maker Huawei.”

The US telecom firms are continuing to import key hardware parts from China. However, they are presently depending on India to develop software solutions to ensure data privacy, says close sources.

As per to, Canalys’ telecom industry researcher released in August, about 70 percent of all smartphones shipped in the US in the quarter has ended on June 30 was made in China, up to 60 percent in the quarter before.

Alongside, the country has witnessed 31.9 million smartphone shipment in the quarter, but the number should rise in the coming quarter as supply chains could become stable from amidst pandemic-induced lockdowns. According to analysts, about 30 percent of the US smartphone market is in the sub-$200 or low-end segment.

“Tensions between the US and China have escalated in recent years, creating a perpetual state of uncertainty for all smartphone vendors except Samsung and LG,” says Vincent Thielke, an analyst at Canalys.