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Business News/ Companies / News/  Nokia maker HMD Global open to sourcing chips from India, says top executive
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Nokia maker HMD Global open to sourcing chips from India, says top executive

Ravi Kunwar, vice-president, India and APAC at HMD Global, told Mint that the country will be a production and export hub for both the Nokia and HMD brands.

Ravi Kunwar, vice-president, India and APAC at HMD GlobalPremium
Ravi Kunwar, vice-president, India and APAC at HMD Global

HMD Global, maker of the Nokia brand of mobile phones, will be open to sourcing semiconductor chips from India for both its brands – Nokia and HMD – for local production and exports “if they meet quality and cost factors". Ravi Kunwar, vice president, India and APAC at HMD Global, told Mint that the country will be a production and export hub for both brands.

HMD will start introducing its own brand of devices – smartphones, feature phones, tablets, wearables and hearables – in the coming quarters, while continuing to introduce Nokia smartphones and feature phones across markets, Kunwar added.

“We’re looking at India as a sourcing hub and supply-chain hub. We’re open to sourcing chips from India if they meet quality and cost factors," he said, adding that HMD was looking at increasing its local sourcing of components, including batteries and chargers, from the present level of 50%.

Also read: Is the worst over for India's smartphone industry?

“Thanks to government initiatives such as PLI (production-linked incentive) schemes, some products have become export-competitive, which is helping the industry to move some of [their business] from China to India. Now if we get more local sourcing, like chipset packaging, definitely we will look into it," he added.

India may benefit from new sourcing rules

Kunwar said that several places, including Europe, have introduced strong legislation regarding sourcing, and specifications have been changed or restrictions imposed on imports from certain countries. These changes could shape India’s manufacturing capabilities and allow HMD to export to Europe from India.

He said that HMD feature phones and smartphones are likely to be launched in India by June or July and will be designed and manufactured locally. Local production is expected to be ramped up by 30-40% by next year to cater to India and export markets, and the company aims to corner a sizable share of the Indian smartphone market, he added. Currently, 15-16 million smartphones and feature phones are made in India by electronics manufacturing services providers, of which five to six million are exported.

Also read: HMD Global to launch and make own brand of smartphones in India in 2024

“We’re developing India as an export hub, and have started exporting the Nokia 105 Classic to the Middle East and Africa over the past six months. We will increase our scale and extend our reach to other markets. Even for HMD branded devices, the approach is that we will bring in more and more production to India and then export," he said.

HMD Global, which owns the licence to make and sell Nokia mobile phones until the end of 2026, launched the first set of smartphones under its own brand, Pulse, for markets outside India earlier this week. The smartphone brand has a tiny share of the Indian market (about 1%, according to Counterpoint Research) but considers India its most critical market. Kunwar said the combination of the two brands – Nokia and HMD – will allow the company to gain a larger share of the market.

USP and price

He added that HMD gives consumers who may not want a Nokia device the option of a “non-Chinese" brand that offers safety and security, apart from repairability and sustainability.

HMD and Nokia smartphones will be priced between 10,000 and 20,000, the largest segment of the market in volume terms. About 152 million smartphones were sold in India in 2023, according to Counterpoint Research. 

India will have a different playbook since the market dynamics are different, Kunwar said. “All smartphones that we will launch here will have 5G. The HMD devices will be launched by the end of the second quarter or early in the third quarter." The company will invest in familiarising consumers with the brand, so a large part of the India investment will be spent on marketing the HMD brand, he added.

Also read: Apple, Samsung boost India’s mobile phones exports to 1.2 trillion

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ABOUT THE AUTHOR
Gulveen Aulakh
Gulveen covers both corporate and economy, and policy sections of Mint. She also covers telecom, IT from the corporate side and disinvestment, finance ministry from the economy side. Gulveen finds the rare mix of sectors she covers to be incredibly interesting.
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Published: 26 Apr 2024, 02:11 PM IST
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