/Why can’t India manufacture mobile phones like China? [Top 2 Reasons]

Why can’t India manufacture mobile phones like China? [Top 2 Reasons]

The difference is technology is the primary reason why can’t India manufacture mobile phones like China. Chipset along with research & development is what they excel at in addition to low cost.

In brief, Due their advanced technology and cost-effective production make them a force to be reckoned with.

That said, will India be able to overcome China in this aspect in the future?

We’ll discuss that once we see why China has been the world leader in mobile phone fracturing for so long.

Here are 2 primary reasons:-

The Chipset

Chip-making machine from ASML (90-100 Million USD per machine)

Apparently to develop a chipset you need to have a machine for chip-making from ASML (a Dutch company that owns 85% share of this machine around the globe). It is bought by companies such as Samsung, Intel, Qualcomm, etc.

And the number of machines India has for it is 0. Even if you google how many googles it shows no answer & no answer is also an answer.

So, why isn’t India investing in it? Cost per machine = 90-100 Million USD.

Research & Development (R&D) sector

The money allotted for R&D in India is as low as 150 Crores. Sure it seems a lot of money but it is not the case considering the money that takes in R&D. China did invest and the result is brands like Oppo, Vivo etc. Have their own patents.

The reasons above give us glimpses of how China invested in this machinery and R&D earlier and gained the early mover’s advantage which resulted in the cost of production per phone in China being the lowest in the world.

So, in order to avoid investing huge amounts of money being spent on machinery and equipment not only India but other countries also look up to China when the production of mobile phones is their concern.

So, as of now, there is no other country that can give out a cost-effective production in the case of mobile devices..

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The smartphone industry has grown a lot in China and there is little scope for entering the market now.

But this is not the case with India as not all the people in India (approximately <20%) have smartphones and the smartphone market here is growing at a rate of more than 20%.

Due to this, mobile manufacturers are thinking about shifting their operations from China to India and selling locally, which is, even more, cost-effective to them, and then using it as an export Hub if possible.

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This all began in July 2018 when Samsung inaugurated the world’s largest mobile factory in Noida, India which is home to 10% of its overall production. It aims to reach about 50% by 2021. Will it happen or not is there to see but the important fact is that they are investing.

Not only Samsung but Mobile industry Giants like Apple and companies like Oppo, Vivo, Xiaomi, and Gionee have set up manufacturing plants in India.

Foxconn the world’s biggest contract manufacturer of mobile phones is planning to build 7-8 additional units in India. Foxconn has been involved in the production of Apple handsets in India since 2019.

In addition to Foxconn, two other Taiwanese suppliers, namely Wistron and Pegatron, are actively engaged in the manufacturing and assembly of Apple devices in India.

It is due to these developments that India secured 2nd Rank in Mobile producers of the world (after China) in 2017.

Current stats states that India has the capacity to assemble approximately 300 Million phones compared to China’s 1.3 Billion. So, the current capacity is the reason why can’t India manufacture mobile phones like China.

But considering India’s rapid growth in the domain, It would be interesting to see which of these countries will be at the top in the upcoming years.