Handset maker HMD Global is doubling down on its strategy to use India as its manufacturing hub and plans to start exports of smartphones and feature phones to Europe and the US. It has started shipping to markets in the Middle East and Africa.
Two years ago, the company started exporting feature phones from facilities of Indian contract manufacturing partners approved under the production-linked incentive (PLI) scheme and added the Nokia-branded G42 smartphone.
HMD has exported 2 million units from India so far and aims to double this to 4 million by the end of 2025. The company initially targeted Middle East Africa as an export market for its HMD-branded smartphones.
“It will naturally go to Europe, and we are considering the US. This will happen step by step. “Manufacturing is a big thing that we are consolidating. We are very optimistic about this. Manufacturing is my own background, and I am recognised for that in the industry. We started exports with G42 smartphones, and India is now the manufacturing hub for our own branded HMD Crest smartphones,” Jean-Francois Baril, founder of HMD Global, told Moneycontrol in an interaction.
He added that the government’s policy-related steps are very encouraging, which will help the company significantly increase exports. “India is becoming very competitive for handset manufacturing.”
The production comprises 70 percent feature phones and 30 percent smartphones and takes place through a partnership with electronics manufacturing services provider Dixon Technologies. HMD has tied up with Zet Town India, a subsidiary of Zetwerk, to expand its capacity.
The Finnish company is now shifting its focus to promoting its brand, HMD, for smartphones in a strategic effort to revitalise its market presence, where it has struggled since its 2016 entry. In August last year, HMD restructured its agreement with Nokia, reducing the use of the Nokia brand for smartphones and reserving it exclusively for feature phones.
This strategic move aims to better compete with Chinese brands in Indian and global markets. The Finnish company, however, will continue to use the Nokia brand for feature phones as it sees strong brand recall in the lower end of the market.
The company introduced its first set of Crest smartphones under its brand, HMD, on July 25 in a global launch in India.
“For smartphones, Nokia doesn't matter too much, to be honest. But, for feature phones, it matters. It is a major transformation. We have been profitable since last year's third quarter and are improving profitability throughout the quarter. We are getting recognition from banks, investors, strategic partners and government officials. Now the time has come for us to grow in the smartphone market,” Baril added.
HMD is betting big on the Indian market to drive its smartphone sales globally. Its India strategy will differ from that of the global markets, where all devices the brand launches will be 5G-enabled, unlike other markets where 4G models will be included.
“We have a plan to be relevant in India now with smartphones,” Baril added.
The founder said that HMD is financially positioned to attract new investors, which can help grow the company even faster. HMD aims to be a full-range smartphone player in India and will launch its high-end Fusion smartphones in the coming days.
Ravi Kunwar, CEO and VP of India and Asia Pacific at HMD, said the company’s primary focus is on the Rs 15,000-20,000 price segment, which is growing fastest in the country due to 5G adoption.
“We can target an even lower smartphone segment if there is a demand. However, people want a 5G smartphone with most features, which increases the final price. Overall component prices are also going up,” said Chief Operating Officer Alain Lejeune.
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