Xiaomi launched its first phone entirely assembled in India yesterday, the Redmi 2 Prime. The company has paired up with manufacturer Foxconn, who recently announced a $5 billion USD investment in new manufacturing facilities in western India. The phones were assembled in a current Foxconn factory, and retail at just over $100 USD, (6,999 INR).
Xiaomi recently regained their top spot as the number one smartphone company in China by shipments last quarter, with an estimated market share of 15%, beating out Huawei and Apple. The company posted lower-than-expected revenue figures last month, apparently affected by a general slowdown in Chinese smartphone sales, though they have managed to maintain steady growth, surpassing 20 billion downloads through their customized Android app store last week.
The Chinese smartphone maker has made strong moves in the Indian market, already amassing a loyal following. In an interview with Bloomberg Business last year, Vice President Hugo Barra said “It is the biggest market for us beyond China, it will someday be as big as China.” CEO Lei Jun echoed this sentiment days after the India launch of the Mi 4, saying he is “fairly confident” Xiaomi will be the number one smartphone seller within three to five years.
India’s ‘Make in India’ program initiated by Prime Minister Modi has made it more attractive for tech companies looking to start assembly in India as labour costs in China rise, though it is unlikely to draw core manufacturing away from the mainland for years to come. Huawei has also invested heavily in assembly and R&D in India after receiving its manufacturing license earlier this year.
Xiaomi had a rocky start in India when it was hit with a lawsuit from Swedish Telecoms giant Ericsson. The Chinese company forced to return a shipment of 100,000 Redmi Note 3G handsets back to their port of origin in Hong Kong, and was banned from selling any device featuring the contentious Mediatek processor.
Like other Chinese smartphone makers, Xiaomi has kept a firm focus on developing markets. They marked a milestone this July when they launched in Brazil, selling phones outside of Asia for the first time. They wasted no time launching their own assembly plants in the county, which has high import taxes on electronics.
Xiaomi has yet to sell their flagship phones in Europe of America, though they launched a store for the western markets in May, featuring MI brand items including headphones, power banks and a fit band.