New Delhi: HMD Global, the maker of Nokia mobile phones, aims to double its revenue in India over the next four to six months by scaling up production capacity while it also shifts towards manufacturing handset parts to beat high import taxes.
“(India is) already one of our biggest markets and it is the cornerstone of our future growth," HMD’s chief executive Florian Seiche said in an interview on Tuesday.
“Globally, there are 25 markets where we are among the top five smartphone players, which is great, but India, for sure because of the size and the potential for further growth, it is definitely a key market for us."
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Finland-based HMD was started by former executives of Nokia and is the exclusive licencee of the Nokia brand for phones and tablets.
The phones are currently assembled at a Foxconn plant near Chennai. Producing components locally is key to competing in a price-sensitive Indian market. Seiche was in New Delhi for the launch of Nokia 6.1 Plus and Nokia 5.1 Plus smartphones. HMD on Tuesday launched Nokia 6.1 Plus at ₹ 15,999, which will be available from 30 August on Flipkart and on Nokia.com. Nokia 5.1 Plus will be launched in September and the price will be announced at that time.
The latest launches have expanded HMD’s portfolio to nine in India’s crowded smartphone market, dominated by Chinese players such as Xiaomi, Huawei and OnePlus.
“Having the right portfolio is first," Seiche said when asked how HMD plans to grow in a highly-competitive market. He said HMD is also changing its marketing strategy to focus on online retail as well as social media. “We want to get the launch phase much bigger as part of the total lifetime volume. That’s why we need to have the manufacturing capability right at the beginning," he said.
The Union government on 2 April imposed a 10% basic import tax on smartphone parts such as camera modules and printed circuit board (PCB) assembly. Also, in this fiscal year budget, the Centre raised customs duty on mobile phones to 20% from 15%. The steps are in line with the government’s Phased Manufacturing Programme to boost local manufacturing of phones.
In its first phase, the government had targeted production of various components for three years—mechanics, die-cut parts, microphones and receivers, keypads and USB cables in 2017-18; printed circuit boards, camera modules and connectors in 2018-19; and display assemblies, touch panels, vibrator motors and ringers in 2019-20.
“We are on track with our partner Foxconn. The SMT (Surface-mount technology) lines have been laid for the PCBs already in Sriperumbudur. We are on track to comply with the PMP programme that the government has laid out. We have started to indigenise components manufacturing because it also makes commercial sense," Ajey Mehta, Vice President and Country Head – India, HMD Global, said. He refused to divulge details of the local capacity addition or revenue targets for India.
The company, which aims to rank among the top three smartphone brands in India in the next three years, could also consider diversifying into other product categories. A final decision is however yet to be taken.
“(We could look at) other connected devices like smart speakers, health categories but we need to be very clear in our own priorities," Seiche said. “Already with the phones, we have so many opportunities to execute. We need to first capture the phone base in India because customers who would like to buy the other ecosystem products will be Nokia phone users first."