NEW DELHI: Chipset makers like Qualcomm and Mediatek have said domestic smartphone makers must have local design capabilities to compete in the country’s smartphone market, which is currently dominated by Chinese players.
They said a production-related incentive or a PLI program along with a geopolitical situation would provide them with an opportunity and help them with a learning curve in the industry.
“PLI will help attract more local companies to build the phones for multinationals or large corporations to build them in India for export and for India. This is the first stage in which there is a learning curve and they say okay, okay, let’s do it. Also, it is important that local OEMs design themselves,” Rajen Vagadia, president of Qualcomm India & SAARC, told ET.
Anku Jain, Managing Director of MediaTek India, separately told ET that more domestic OEMs in the ecosystem are considering local design capabilities in the country. “They are trying to create more talent pool in India because it is available here, we have very high quality engineering available here.”
Jain said Indian brands want to connect with the Indian market and know what will work for local consumers. “We work with them and do R&D together. For one of the players who was launching a 5G phone, we closely cooperated with them.
Mediatek, he said, designed its Dimensity 5G open resource architecture to give brands more flexibility to customize key features of 5G mobile devices to suit different market segments.
Vagadia said the likes of Lava and Micromax are very “well positioned” with the current circumstances. They understand distribution, which is one of the most important and difficult parts of the phone business. “The problem they have to solve is the design, which they have to step in and start investing.”
The chipset makers’ comments come at a time when part of the industry is pushing the government to stop these brands from operating in the sub-Rs 12,000 segment in a bid to revive Indian businesses. The sub-Rs 10,000 segment now represents only 35% of the market compared to 84% in 2015, in terms of shipping, according to data from Counterpoint Research. This, while the Rs 10,000-Rs 20,000 segment has grown to account for 45% of the market in 2021, from 13% in 2015. The segment above Rs 20,000 accounted for 20% of the market in 2021, from just 3 % in 2015.
Notably, the Minister of State for Electronics and Computers, Rajeev Chandrasekhar, recently said that whenever the government feels that there is crowding out of Indian brands due to unfair trade practices, it wants to step in and ensure that these issues are resolved.
He, however, clarified that there was no proposal to ban the sale of handsets below Rs 12,000 made by these companies and added that Indian companies have a role to play in the country’s electronic ecosystem, but this does not mean the exclusion of foreign brands.
Faisal Kawoosa, Founder and Analyst at TechArc said that among Indian brands, only Lava seems to be playing its cards right. “They still seem to be active and fighting, even after releasing a few 5G smartphones. Others I see completely out of sync and I wouldn’t be surprised to see near extinction as 5G becomes mainstream,” he added.