The biggest gains for mobile brands can be summed up as - reduced time-to-market from local production bases to domestic consumers, from finalising design to local offset of moulds to printed circuit boards to the assembly lines, to adding locally sourced accessories and to designing local packing boxes.<\/p>

\u2018Make in India\u2019 is expected to create 100 million new jobs by 2022 in the manufacturing sector alone, and account for 25% of the country\u2019s GDP by 2022.<\/p>

Under \u2018Make in India\u2019 the government introduced time-bound initiatives such as the Phased Manufacturing Programme (PMP) to promote use of locally made components in mobile phones. The success of PMP is expected to take the number of locally manufactured mobile phone units to reach 520 million by 2019-20.<\/p>

The government also levied duties on imports of key smartphone components such as camera modules and PCBs making imports of components expensive while giving providing a stimulus to local manufacturing. Recently, the government exempted 35 machine parts from basic customs duty (BCD) to boost mobile handset production in the country. Currently, there are more than 123 local facilities that produce and assemble mobile devices and accessories like chargers, batteries, power banks and earphones in India.<\/p>

Government of India also responded to a joint plea by members of The Mobile Association (TMA) and extended the date of mandatory certification and testing of mobile devices from the earlier notified 1st October 2018 to 1st April 2019. This was done to accommodate smooth roll-out of the proposed Telecom Engineering Centre (TEC) Mandatory Testing and Certification of Telecom Equipment (MTCTE) regime for mobile phones and other devices.<\/p>

Emerging Opportunities in Smartphone Manufacturing: 5G and Beyond<\/strong>
Out of India\u2019s 1.3 billion people only half use mobile phones and less than half of these mobile phone users have a smartphone. While the number of smartphone users in India is expanding phenomenally, the demand for feature phones has remained steady. As customers keep looking for upgrading their mobile, the India smartphone market will continue to see double digit growth as per IDC.<\/p>

The entry of Reliance Jio disrupted the mobile telephony market and spurred a price war in low mobile data tariffs. Both smartphone manufacturers and mobile app developers made good of this opportunity - in early 2018 India bagged the top spot in app downloads.<\/p>

5G auctions are expected to be held in the second half of 2019 and this time India has taken an aggressive stance and wants to be among the early adopters. 5G is expected to transform the mobile landscape with massive boost in internet speed and significantly reduced latency. Trials are already underway by Telecom Service Providers (TSPs), chipset vendors and device manufacturers to roll out 5G technology by 2020. As per analyst firm Statista, the worldwide market for 5G-enabled mobile devices is estimated to grow from 2 million units in 2019 and touch 1.5 Billion units by 2025. This presents a very large revenue opportunity for Indian mobile device players to bring in innovation in design of 5G devices and scale up their manufacturing capacities.<\/p>

5G can become a catalyst for innovation across various technologies like industrial adoption of Internet of Things (IoT), Artificial Intelligence (AI), Machine Learning, and Augmented Reality (AR). This will further open up new channels for business growth and development for the mobile device industry.<\/p>

Today, IoT is being adopted by corporates across industry verticals like Retail, FMCG, Healthcare, Utilities, Oil and Gas, Travel and Transportation etc.<\/p>

Artificial intelligence and machine learning are being used to gauge consumers\u2019 preferences and deliver tailor-made content to them. Here mobile device players can collaborate with software\/app developers.<\/p>

Another technology which can drive growth of mobile phone usage is Augmented Reality. It is the same technology which is used in Pokemon Go. For years AR has been used mostly in video gaming and military applications but now it is coming to mobile devices and is expected to go mainstream in industries such as Retail, Construction, Technical Support and Healthcare.<\/p>

The boom in usage of smartphones and low-cost data has led to an insatiable demand for mobile content especially in regional languages. With 234 million local language internet users, the number is expected to rise to 536 million by 2021 while English users will be only 199 million according to arecent report byGoogleand KPMG. This is an excellent opportunity for mobile phone players to partner with content providers for seamless streaming of audio and video content.<\/p>

With data privacy becoming a major concern, mobile handset manufacturers are stepping up action to strengthen device security. Facial recognition technology is fast coming up as a bypass to the legacy password\/PIN system. Incorporating these technologies in new mobile device models can serve as a major product differentiator for Indian mobile phone players and give them a distinct competitive advantage.<\/p>

Challenges to Overcome: Innovation, Cost Competitiveness and Scale<\/strong>
Despite the government\u2019s best efforts to encourage manufacturing of mobile devices locally, India still has a long way to go before it becomes a manufacturing powerhouse. The dearth of skilled labour and investments are some of the challenges that are still lacking.<\/p>

The major concerns of the mobile industry at this stage may be listed down as: Lack of infrastructure, Limited Test Laboratories for testing and certification for SAR, EMI\/EMC, Security and other technical requirements; Department of Telecommunication\u2019s Test Portal not ready; absence of Single Window for Certification; Turnaround Time; ad hoc fee structure of Conformity Assessment Bodies (CABs)\/Certification Bodies (CBs), and IPv6 and Security requirements.<\/p>

India has become the new battleground for mobile phone vendors of all hues with the scale tipping more towards China-based players that have displaced the earlier dominant players in the market with many forced to or, on the verge of shutting shop. The changing market dynamics and fierce competition has led to the unceremonious exit of many players making way for new ones.<\/p>

According to Counterpoint Research, the number of mobile phone makers who entered India in 2015 was 15 and there were two exits, in 2017 there were nine entries and 13 exits and in 2018, as of date, the market has already witnessed only five new entrants and 10 exits.<\/p>

While the dominant mobile players in the Indian market have deep pockets to maintain their market leadership, the smaller players lose out as they don\u2019t have enough volumes, survive on small margins and lack the cash at their disposal for investments. India lacks world class component makers and factors such as 10% duty on printed circuit boards (PCBs) is making it harder for them to set up local manufacturing.<\/p>

To truly realise the vision of \u2018Make in India\u2019 government needs to encourage setting up of factories which manufacture mobile device components such as camera modules, LCD modules, sensors etc. and introduce industry friendly duty structures and policies and incentives.<\/p>

While India is cheaper in terms of labour cost as compared to China where costs are rising, surprisingly China is still a preferred choice for mobile production by global manufacturers as well as Indian brands.<\/p>

There is an urgent need to improve the quality of available infrastructure, accessibility to test and certification labs to cater to the new MTCTE regime, skilled resources, and facilitation of a true \u2018single window\u2019 channel for mandatory compliances to improve ease of doing business.<\/p>

Clearly, the industry and government need to collaborate and deliberate on a comprehensive policy\/action plan to address all concerns to help India become a global hub for design, product innovation and value-added large-scale mobile device manufacturing to make it second to none.<\/p>

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