Shanghai-based smartphone maker Phicomm plans to invest around $1 billion (Rs6400 crore) in India by 2017-end in setting up five business units including mobile phones, SOHO, Enterprise, Cloud services and Intelligent Cities in a phased manner.
A top executive said that that the company would begin with investing $1 million for setting up an R&D unit in Gurgaon or Bengaluru, which will employ 50 people. The company may also consider setting up a local brownfield assembly unit on its own or may consider a second option of beginning contract manufacturing. It will decide on the modus operandi by March 2016.
“We are going to start with selling mobile phones and SOHO, then get our R&D in place, then manufacturing base in place and the next is to bring in our data centers and Cloud services into India, so we can offer localise sevices off servers that are running out of Indian Soil,” Jeffrey Fan, president of global sales at PhiComm.
SOHO refers to Small Office Home Office networking products such as routers, a category in which Phicomm is claims to lead in China. It plans to launch these products in India by Diwali in India. “This year we are targeting $15 million revenue. Our overall investment including local staff, R&D centre, data centre, etc would be about $1 billion,” he added.
If the company decides to begin assembling phones on its own it will invest $5 million. The company is simultaneously in talks with two to three state governments for full fledged manufacturing unit. With these plans, Phicomm takes a lead in terms of investments coming from China or Taiwan based smartphone brands including Vivo, Meizu, ZTE’s Nubia and Coolpad’s Dazen, that have recently entered the India market.
Outside of China, “India is our second largest potential market and that’s the whole reason why we have decided to come with a full fledged plan,” Fan said, when asked about the timing of entering the crowded and competitive Indian handset market.
The company has less than 1% market share in China and its presence isn’t comparable with No 2 Xiaomi and No 3 Huawei in the smartphone market which grew 7% annually, but slowed 10% sequentially in spite of the Chinese holiday season, in the January to March quarter this year.
Phicomm had launched its first device in India in June this year. It will launch a mass market 4G device — Energy 653 — priced under Rs 6,000, on August 10. It faces Apple as the No 1 player in China, and Samsung as the top player in the Indian smartphone market. The company’s R&D in India will help in designing future products as demands of the country’s consumers which are different from that of China.
“We started on 13th of June, we are expecting to exit a revenue in excess of $15 million this year, coming from sale of around 100,000 smartphones by the end of this year.” The investments into its other plans will come from global revenues of $1.5 billion in 2014 which it expects to see it growing at 50 per cent this year. The company had initially announced a $100 million investment for India earlier this year which included marketing.