Why can't India manufacture mobile phones like China?

Why can’t India manufacture mobile phones like China? Is mobile technology that advanced?


A short answer as to why India can’t manufacture mobile phones like china is the difference in technology It keeps us Indians from manufacturing phones like china. Due to the fact that they have advanced technology and they provide cost-effective production.

A long answer would involve what the actual difference in technologies is between the two countries and that is what we are going to discuss. Here are 2 major 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 150Crores. 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 on how china invested in these machinery and R&D earlier and gained the early mover’s advantage which resulted in the cost of production per phone in china the lowest in the world.

So, in order to avoid investing huge amount of money being spent on machinery and equipment’s not only India but other countries also look up to China when 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 case of mobile devices..

The smartphone industry has grown a lot in China and there is little scope of 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 reason, mobile manufacturers are thinking about shifting their operations from China to India and sell locally which is, even more, cost-effective to them and then in future also use it as an export Hub if possible.

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, Gionee have set up manufacturing plants in India. Foxconn the worlds biggest contract manufacturer of mobile phones is planning to build 7-8 additional units in India.

It is due to these developments that India has 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, to conclude we can say that though currently, China is the world leader it is still very much possible for India to takeover.

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