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Friday, May 24, 2024

Google to manufacture Pixel smartphones in India

Google will start assembling the Pixel smartphone lineup in India, a company executive said, becoming the latest tech giant to bet on the South Asian market for devices manufacturing.

The company intends to start the local manufacturing with the current Pixel 8 smartphone in India and expects to ship the India-made batch starting next year, Rick Osterloh, Senior VP of Devices and Services at Google, shared at the company’s annual India event Thursday.

Thursday’s announcement follows Google recently partnering with HP to manufacture Chromebook laptops in the country. “We are partnering with international and domestic partners to produce Pixel smartphones locally. It’s an early step towards expanding our production here to meet the local demands for Pixel devices and even more importantly it’s a huge step forward in Google’s commitment to India,” he said.

Google, which identifies India as its largest market for many of its services by user count and has committed to invest over $10 billion in the next few years in the country, is the latest tech giant to make a push to turn India into a manufacturing hub. Apple, whose manufacturing partners began locally assembling iPhones a few years ago, now manufactures the newest models in the country.

New Delhi is aggressively incentivizing companies globally, offering billions of dollars of perks, to court them to set up manufacturing bases in India. The incentives comes at a time when many firms — including Apple — are looking to cut their reliance on China for manufacturing their devices in what analysts often call “China + 1” strategy.

“With India’s growing domestic demand, and government’s focus on local manufacturing including policy support (lower taxes, production linked incentive scheme etc) and export opportunity driven by China + 1 strategy of global players, India’s EMS industry (finished product and electronics manufacturing) is at the cusp of robust medium- term growth,” Macquarie analysts wrote in a recent note.

“We see opportunities for two broad sets of players: • a) ODM/OEM product manufacturing (predominantly B2C play on end product basis) that supply to brand plays and plan to backward integrate with select component manufacturing. Listed players in this space include Dixon Technologies, Amber Enterprises, PG Electroplast, and • b) predominantly electronics (like printed circuited board assembly, RFID chips etc; largely B2B plays on end-product basis) manufacturer for application across a wide range of industries like automobile, defence, industrial, consumer products, healthcare, aerospace etc. These companies selectively plan to forward integrate with box build services that currently account for 18-54% of their revenues.”

The various incentives the Indian government is offering to companies. Over 670 companies could drive incremental revenue of $455 billion with potential to generate 6.3 million jobs over 5-6 years, Goldman Sachs estimates. (Image and data: GS)

More to follow.

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