India is becoming a key market for ambitious smartphone makers, so much so that companies are setting up shop there outright. Xiaomi, which once sourced and assembled all of its phones from or in China, has announced it will work with Foxconn to assemble phones specifically for India.
Xiaomi’s Redmi 2 Prime, an upgraded version of the company’s budget Redmi phone, will be made at a Foxconn plant in Andhra Pradesh, in southern India. All of the Redmi 2 Prime devices produced there will be sold in India, the company says.
Xiaomi shipped more devices than any other smartphone maker last quarter in China, with an estimated market share of about 15%. But with first-time smartphone buyers shrinking in numbers, the company has to look beyond its borders to grow sales. It entered India in July 2014, and by the end of the year managed to corner 4% of the market, according to IDC.
Foxconn, meanwhile, has said it will invest $5 billion over the next five years to develop an electronics manufacturing plant in Maharashtra, on top of establishing additional factories and data centers. Its move to India comes a byproduct of rising labor costs in China, coupled with favorable policies for investors from Narendra Modi. The Indian prime minister aims to create 100 million manufacturing jobs as part of his “Made in India” campaign.