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Gionee India in talks with Foxconn, Global Devices Network for contract manufacturing of smartphones

New Delhi: Chinese handset brand Gionee will go for contract manufacturing for its locally made smartphones and has shortlisted three vendors, including Foxconn Technology Group and Global Devices Network, a person familiar with the matter said.

Gionee is expected to announce a partnership with one of these players for domestic manufacturing in 2-3 weeks, the person told ET, adding that the company expects to start commercial production by the end of December 2015.

Arvind Vohra, chief executive and managing director of Gionee India, who owns a 26% stake in the Indian arm, declined to comment on shortlisting of contract manufacturers but confirmed that the handset maker will go for contract manufacturing for its devices in the initial phase.

“In the second phase, we may also look at entering into either a joint venture or set up our own plant to support our ambitions,” Vohra said, adding that the company has internal accruals worth around $50 million (Rs 318 crore) to be spent as per the need in India.

Vohra said the company will initially make its “P” and “M” series, entry to mid-range of smartphones, in the country.

An email sent to Foxconn did not elicit any response, while Global Devices Network couldn’t be reached for comment.

Foxconn, the maker of iPhones and iPads for Apple and Kindles for Amazon, is planning to set up 10-12 factories in India, each employing at least 10,000 people, with an initial investment of about $2 billion over the next five years. The Taiwan-headquartered company has reportedly signed a deal to make phones for Chinese handset maker Xiaomi at Sri City in Andhra Pradesh.

Global Devices Network recently bagged a contract from Taiwan’s HTC to make entry- to mid-segment devices in Noida, Uttar Pradesh. Production is expected to start from mid-July, initially catering to HTC’s requirements in India and eventually Africa and the Middle East. It already produces smartphones for Zen and distributes Samsung smartphones, manufactures mobile phone accessories, invests in companies that distribute HTC smartphones and runs a cellphone retail chain.

Gionee, which has a market share of 4%, aims to make India a manufacturing hub outside China to cater to demand in African and SAARC countries, including Pakistan, Bangladesh, Sri Lanka and Nepal, Gionee’s president William Lu had told ET. However, during the initial phase, the company will aim to cater to demand in the Indian market.

The device maker ended 2014-15 with revenue of Rs 2,750 crore, a more than fivefold jump from the previous year. It is targeting a turnover of Rs 6,000 crore in the current fiscal year. In order to achieve this, the company is investing Rs 225 crore on marketing. It also aims to break into the top three vendors in the country with 100% growth in revenue.

The company Tuesday expanded its offline retail channel through its collaboration with leading retail players including Spice, The Mobile Store, Mobiliti World, Jumbo Electronics, Croma Retail and Planet M.

Source: ETTelecom

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