India, population 1.2 billion, is also the world’s fastest-growing smartphone market. Now two of the world’s most popular phone makers are racing to make sure they grab as big a piece of it as possible. On Monday, Chinese smartphone upstart Xiaomi announced that it is teaming with Taiwan-based manufacturer Foxconn to start assembling handsets in India. Xiaomi’s Redmi 2 Prime, an India-specific upgrade to its Redmi 2 budget smartphone, will be manufactured at a Foxconn plant in Andhra Pradesh in southern India. Both Xiaomi and Foxconn declined to disclose how much was being invested in the initiative, or what the production capacity would be.
Manufacturing smartphones locally is a significant step towards incorporating Xiaomi into the fabric of India in the years to come, Hugo Barra, vice president of Xiaomi Global (and a former Google Android executive), said in a statement. Xiaomi appears to be taking advantage of dipping into a fresh market with potential new customers.
Though the tech giant shipped more devices in China than any other smartphone maker during the second quarter of 2015, China’s smartphone market has begun showing signs of saturation. To snag first-time smartphone buyers, Xiaomi has had to look beyond the borders of its own country. It already sells its low-cost phones in India and Brazil. But a manufacturing presence in India would undoubtedly help Xiaomi gain a stronger foothold by allowing it to handle inventory more efficiently and reduce shipping lead times.