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Samsung Electronics

Samsung launches world’s largest mobile phone factory in India

The Korean electronics giant’s new manufacturing facility in India will have the capacity to assemble 120 million smartphones per year

PUBLISHED : Monday, 09 July, 2018, 4:19pm
UPDATED : Monday, 09 July, 2018, 8:23pm

Samsung Electronics, the South Korean maker of Galaxy smartphones, said it is opening the world’s largest mobile phone manufacturing facility on the outskirts of the Indian capital, as smartphone demand in the country surges.

The factory was inaugurated by Indian Prime Minister Narendra Modi and South Korean President Moon Jae-in on Monday. Both leaders visited the facility adjoining New Delhi, according to India’s ministry of external affairs.

“The opportunity is just massive,” said Faisal Kawoosa, who heads new initiatives at research firm CMR. “Such a large facility will help Samsung cater to the huge demand in a country of 1.3 billion people where there are only 425 million smartphone users.”

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Since taking power in 2014, Modi has pushed his “Make in India” initiative, which encourages companies to set up plants in the country, as the nation attempts to bolster domestic manufacturing. India attracted the highest ever foreign direct investment in the past year with inflows totalling US$62 billion.

India’s smartphone market grew 14 per cent with total shipments of 124 million units last year, the fastest pace of growth among the world’s top 20 markets, according to technology research firm IDC.

Demand for new mobile phones is surging in India, helped in part by billionaire Mukesh Ambani offering US$23 4G feature phones, free voice services and cheap data plans.

Chinese smartphone maker Xiaomi said in April it will set up three more factories in India.

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The new Samsung factory will have the capacity to assemble 120 million smartphones per year, and make everything from low-end handsets that cost under US$100 to its flagship S9 model, according to the company.

Indians favour low-end smartphones priced at US$250 or less, given the low average annual income of its people, according to Bloomberg Intelligence. That is one reason Apple has struggled to gain market share in India, as most iPhone models are priced beyond US$500, according to a Bloomberg Intelligence report earlier this month.

India overtook the United States last year to become the world’s second-largest smartphone market after China. There will be 780 million connected smartphones in 2021, compared with 359 million in 2016, according to a study by Cisco Systems.