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Google's proposed plan to establish manufacturing base in India can help in building it's foot hold in the country
Over the past few months, Apple has made the strategic decision to reduce its smartphone production in China and shift it to India. This move by Apple aims to diversify its smartphone assembly and reduce dependency on a single country. India, with its rapidly developing infrastructure and supportive government schemes such as production-linked incentives, has emerged as the preferred location for expanding the production of innovative iPhones. Earlier this year, contract manufacturer Foxconn secured the mandate to manufacture iPhones for Apple.
Taking a cue from Apple's strategy, Google is now actively searching for suppliers in India to assemble its Pixel smartphones. Reports suggest that Google executives, who were in India ahead of Prime Minister Modi's scheduled US visit from 21-24 June, have approached Lava International, Dixon Technologies, and Foxconn Technology's India arm, Bharath FIH.
Taking a closer look at production history of Google Pixel smartphones, it becomes apparent that the assembly line has predominantly been cantered in China and Vietnam. In September of last year, The New York Times reported that Google had been exploring the possibility of shifting a significant portion of its Pixel phone production to Vietnam. Some reports even suggested that Vietnam could supply up to half of Google's smartphones. However, these reports were never officially confirmed.
Besides India, Vietnam, Bangladesh, and Mexico have emerged as contenders for American companies seeking alternative manufacturing sites. The disruptions caused by COVID-19, supply chain issues, and travel restrictions have prompted companies to move their manufacturing bases out of China. However, the United States and European countries heavily rely on China for crucial supplies.
The Google Pixel Conundrum
Ever Since its entry into the Indian market in 2016, Google has struggled to take off and find success among Indian consumers. Google aimed to become the next Apple in the Android phone segment worldwide by delving into the manufacturing of both software and hardware. Previously, its phones were manufactured by companies such as HTC, LG, Huawei, Motorola, and others.
Pixel phones are considered premium devices rather than mass-market products. However, their high pricing has discouraged consumers from purchasing them. Google faced criticism from users of its earlier Nexus smartphones due to their price points. At the time, competitors were offering better features at similar price ranges. Ultimately, Google fell short of expectations, failing to capture the attention of smartphone users in India. Currently, Google holds less than 1% of the market share in India.
Google's Strategy for Revival
Google faces tough competition from rivals like Apple and Samsung, making it challenging to sustain its position in the smartphone market. Google Pixel lacks a strong foothold and loyal customer base in the domestic market compared to other brands.
Since its launch, Google Pixel has struggled to keep up with new trends and innovations. Recognizing the need to keep pace with rival brands, Google announced the upcoming launch of its foldable phone, Pixel Fold, at I/O in May. With this release, Google plans to give tough competition to Samsung, which currently dominates the foldable phone category. Samsung's fourth-generation foldable smartphones ruling in the consumer market. Google understands the surge in demand for foldable phones and aims to establish its presence by leveraging its technological prowess. It also plans to offer a trade-in option, encouraging users to switch from Pixel phones to the Pixel Fold.
Google's decision to manufacture Pixel phones locally in India will significantly contribute to its endeavour to establish a firm foothold in the Indian market. Local production facilitates the sale of phones at a lower price and reduces the time gap between global announcements and domestic launches. Additionally, Google can leverage the government's Production-Linked Incentive (PLI) scheme, which can boost device exports. Local assembly is poised to gain a significant advantage in capturing the attention and loyalty of Indian consumers. This shift by technology giant can also help in other major companies take note and follow the suit. Strategic cooperation by the government can also help India in meeting its goal of becoming export hub and emerge as next China.
Author is a mass communication student at IIMC, New Delhi. For any feedback, write to author at hmtjogi@gmail.com
