Ambani’s goal of governing the Indian smartphone market with problems | Business and Economy News


Supply chain disruptions, rising parts prices, and cultural clashes with joint brand partner Google are hurting launch plans.

Billionaire Mukesh Ambani’s plan to conquer the Indian market with a locally assembled Google smartphone faces headwinds, with supply chain disruptions and rising component prices suppressing production volumes as they go say people familiar with the subject.

Ambiance’s Reliance Industries Ltd. initially predicted sales in the hundreds of millions in the early years for the economic device, but is now targeting a small fraction of these at launch, according to people. The shared brand phone is scheduled for presentation at the conglomerate’s shareholders ’meeting on June 24, followed by an official debut as early as August or September, citizens said, asking that no ls call them, as the plan is not public.

The tycoon wants to rebuild the world’s fastest-growing smartphone market in the same way he did wireless services, with aggressive pricing. But any delay in the effort would mean a significant setback for Reliance and its Indian manufacturing partners. Chinese rivals such as Xiaomi Corp., Oppo and OnePlus have established their brands and created local manufacturing facilities while chasing the same consumer audience that upgrades basic 2G devices.

Google engineers from Reliance and Alphabet Inc. they have combined forces to adapt a technology-sensitive but price-sensitive device to the country, of which Internet users are expected to exceed 900 million by 2025. They have created a hardware design and a version of the operating system Android that can offer a high-end experience without expensive materials, according to people. But obtaining components has proven to be an obstacle after the coronavirus pandemic increased worldwide demand for electronics and caused shortages.

Reliance and Google’s cultural differences have also emerged during the process, with the Indian company relying on a top-down operating model, while American engineers are more self-directed, according to people. This led to last-minute midnight decision-making and calls, in contrast to Google’s usual preference for planning things months earlier.

Representatives from Google and Reliance did not respond to emails seeking comments.

A meeting between Reliance and Google teams as early as last week, just fifteen days before Ambani’s planned presentation, gave no purpose on the hardware specifications, people said. Vital parts, such as screens and chipsets, are scarce and take longer than usual to cause uncertainty in decisions about hardware options.

The time to get these materials has doubled to about 60 to 75 days from the first 30 to 45 days due to the shortage in China, which produces and supplies components for almost every smartphone on the planet, according to people.

Reliance plans to mount the smartphones locally [Dhiraj Singh/Bloomberg]

A microprocessor that goes into a battery charger for smartphones has almost doubled in price, from 5 cents in 5 months to a matter of months, according to a person who works for an Indian contract maker in talks to mount the Reliance-Google device. Screen prices have risen by 40% and getting a massive distribution of chipsets is extremely difficult, the person said.

Delivery times for so-called surface mount technology machines that can gather thousands of micro-components of smartphones per hour have reached six months, compared to the 45 to 60 days that occurred recently in January, they said. say several people.

High shipping costs have added to the challenges. A 20-foot container from China to India that cost $ 800 pre-pandemic jumped to $ 5,000 and now goes to $ 3,600, according to a person from another Indian contract maker.

Reliance and Google started the project after the companies established a broad alliance last July. For about nine months, Google engineers in Silicon Valley have been working on the challenge of delivering a premium software experience at a price hitherto unseen. The team tries to make the operating system more sensitive and resistant to blockages with more frugal hardware. This is a family effort for the company, which has had several previous initiatives to make Android friendlier with more basic devices, such as with its Android One boost.

Ambani has secured more than $ 20 billion in investments from U.S. giants, including Facebook Inc., Google and Qualcomm Inc., to bolster its technology presence. In addition to the new smartphone, it is expected to update this month the collaborations with Qualcomm and Facebook’s WhatsApp in 5G and e-commerce.

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