Indian mobile phone company Lava Mobiles is not only selling its products in India, it is now producing phones for other brands. Lava is said to be in agreement with HMD Global and Motorola to produce Nokia and Moto phones at its manufacturing facilities in India. Since Nokia and Motorola smartphones have “Made in India” engraved on their backs, their companies are resorting to convenient and inexpensive methods to ensure this. According to a report, Lava Mobiles is also in talks with telecom companies to get subsidies on these phones.
Citing a person familiar with the development, an Economic Times report said Lava Mobiles has reached “an advanced level of talks” with one of India’s telecom companies. This would mean that these phones will be co-branded. The source also said the company is speaking with all three of India’s major telecom companies about the design and manufacturing partnerships it has hired from HMD Global. Additionally, Lava is also holding similar discussions with Motorola for phone manufacturing in India.
Nokia, Motorola and Lava
Lava Mobiles is one of the oldest smartphone companies with Indian roots. Existing for over a decade, Lava Mobiles not only sells their smartphones, but also serves as a hub for manufacturing. Lava Mobiles has made low-cost phones for US companies such as AT&T and General Electric, in its efforts to expand contract manufacturing.
The Indian company has been approved under the Production Linked Incentive (PLI) program recently announced by the Indian government to promote local manufacturing. Under the scheme, every manufacturing company must achieve a goal, including Lava which has increased its production capacity to 30 million smartphones and 45 million feature phones now.
Lava has now started manufacturing Nokia phones for HMD Global. It is beneficial to HMD Global because Lava is a local manufacturing company for India, which has been trying to download some manufacturing contracts from FIH Mobile for international sales.
Motorola, on the other hand, was recently reported to be in talks with Dixon Technologies and Lava for smartphone manufacturing contracts worth $ 1 billion (approximately Rs 7,398.26 crore).
The main reason Lava is pushing for ties with foreign companies, the source said, is its strategy of combining manufacturing with the supply chain, so that their ecosystem can be leveraged to increase production at local facilities. This would allow Lava to meet the targets for the PLI scheme, as well as emerge as a leading smartphone maker in India.
Lava is India’s second largest feature phone maker, and derives its largest share of revenue from the government. He hopes to increase his business revenues from Rs 70 lakh last year to nearly Rs 300 crore this year, thanks to his link with government schemes, including the one in which he shipped over 1.7 lakh smartphones to the Punjab government.
However, its smartphone business has declined in recent years. With the new scheme, Lava Mobiles wants to give a new lease of life to its smartphone manufacturing business and leverage it to push their smartphones back to India to face the competition.
New opportunities for telecommunications companies
As for the telecom companies, Reliance Jio and Airtel were keen to support their phone manufacturing business. Both Jio and Airtel have already tried to produce devices, but due to stiff competition in the market, their devices have failed to survive the onslaught, forcing these companies to cut back on their production plans.
Jio by Reliance Jio Phone is manufactured by Flex but is planning to bring low-cost 4G phones now in partnership with Google. The manufacturer of these phones is not immediately known. This follows Google’s multi-dollar investment in Reliance Jio to further strengthen its presence in India. This would involve selling extremely affordable smartphones, those with low prices like feature phones, equipped with Android.
Airtel, on the other hand, is said to be talking to phone vendors to make and sell 4G phones under the carrier’s subsidy model. This model is not new to the Indian mobile ecosystem. In the early days of cell phone penetration, Reliance Mobile began selling carrier-locked CDMA phones with an operator subsidy. Subsequently, Tata Indicom entered the same space. Jio started selling Lyf phones with the same business strategy before his business went bust.
Lava Mobiles has executed production contracts for several companies, becoming the second largest feature phone manufacturer in India.
- Lava Mobiles is said to have started manufacturing Nokia phones in India.
- It is also in advanced talks with Motorola for phone manufacturing contracts.
- Lava is a company approved for the government’s PLI scheme.