Samsung Expands Local Earning in India

South Korean smartphone maker Samsung Electronics has expanded local earning in India.

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Samsung Electronics has expanded local procurement in India to software as it attempts to regain the lead in the country’s rising market from low-cost Chinese opponent Xiaomi.

Samsung lately formed a contract with Indian software developer Indus OS to allow its Galaxy Apps store to support different local languages.

The smartphone producer, which in July opened what it called the world’s biggest mobile factory on the borders of New Delhi, looks to nearly double the number of smartphones it makes in India to 120 million a year from 689 million by 2020. The Indus contract provides a benefit over rivals such as Xiaomi and Vivo, which have yet to introduce apps in local languages.

The output expansion seeks "to cope with fast-rising demand in India's smartphone market as well as increase exports to overseas markets," Samsung said in a statement.

The basic Indus operating system allows rural customers of Samsung Galaxy phones download apps without signing in with an email address, which several of them do not have. The software supports 12 local languages in addition to English.

"With a spurt in number of users from smaller towns and cities, we foresee a tremendous growth in demand for vernacular app economy," said Sanjay Razdan, senior director at Samsung India, adding that consumer feedback had driven the move to support more languages.

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Corporations including Xiaomi, Oppo, Vivo and Apple now manufacture phones in India but have yet to make large local investment in production of significant parts such as the display panels and batteries. Most of the parts for their phones are still imported from China.

 “The Indian operations of smartphone makers are now shifting to higher-value processes from basic assembling,” said Tarun Pathak, associate director at Counterpoint Research. “Though we are far behind China in terms of manufacturing of mobile phones, value addition in India has increased to 17% in 2018 from 5.6% in 2016,” he said.

According to research firm, Xiaomi held a 28.9% part of the Indian smartphone market in 2018, leaving 22.4% for Samsung and 10% for Vivo. Samsung, which dominated the Indian market for some years, lost its lead to Xiaomi about last year.

In February, Samsung launched a new line of affordable smartphones for India called the Galaxy M series. Cost between 10,000 rupees ($145) and 20,000 rupees, the smartphones are positioned as rivals to Xiaomi devices. Market spectators say this shows Samsung takes pricing seriously as a way to win back market share.

For the meantime, India is trying to lift local manufacture by taxing import duties on parts such as phone chargers, headphones and batteries.

Analysts say that the supply base in India is still developing and that will take several time before corporations consider depending on Indian makers instead of local companies of international makers.

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