Google looks to shift some Pixel production out of China

google pixel
Bordeaux, Aquitaine, France, Sept 12, 2020: Google Pixel 5 smartphone. Image by Ocean Production | Bigstockphoto

Google is exploring the possibility of moving some production of its Pixel smartphones from China to India amid regular Covid-19 lockdowns and geopolitical tensions between China and the US.

Google has reportedly sought bids from contract manufacturers to assemble between 500,000 and 1 million units of its Pixel smartphone, The Information reported.

If all goes well, Google will be shifting 10-20% of its annual production to India, which is currently developing its own mobile manufacturing ecosystem and export hub to compete with rival countries like Vietnam and China.

Google also looking at Vietnam

Local production in India would enable Google to avoid the heavy import duty the Indian government currently levies on smartphones. That could effectively reduce the cost of Pixel smartphones significantly for end consumers.

Google is also exploring the possibility to move some Pixel manufacturing to Vietnam, Nikkei Asia reported. Vietnam has attracted various handset brands including Samsung.

India is still a small market for Pixel smartphones, which are typically priced in the premium segment currently dominated by Apple and Samsung. Google hasn’t been aggressive with its handset strategy for India. In fact, it has skipped launching the flagship versions of its Pixel phone in India for the past three years.

However, Google has been working with local brands to push Android handsets and smart TV ecosystem.

The company is also working with Reliance Jio to develop a low-cost 5G smartphone as a followup to its 4G variant, JioPhone Next. Both the companies have co-designed the phone and developed an India-specific operating system, based on Android, called Pragati OS.

India’s smartphone manufacturing incentives

India, the world’s second largest smartphone market, is also Google’s largest market by users. It has committed to spend $10 billion over the course of a few years.

India is offering incentives to companies to locally assemble mobile phones under the production-linked incentive scheme, which has been availed by players like Samsung and Apple contract manufacturing partners, Foxconn, Wistron and Pegatron, along with a clutch of Indian players.

Apple is bullish on the Indian market, and is leveraging the country’s schemes for manufacturing iPhones for both domestic and export purposes. Apple, which started making iPhones in India five years back, will soon start producing its new iPhone 14 lineup in the country later this year.

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