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I am creating a Powerpoint Presentation on why outsourcing Microsoft mobile phones to India is a good idea. I need as much information as possible to complete this assignment.
The slides I have so far:
Slide 1: Why India?
India has a population of over 1.2 billion people.
Has a substantial young population that is embracing technology at a faster rate than other developing countries.
India has a big market for mobile phones and almost all major brands are available there.
Slide 2: Why India? (CONT.)
India has a large population and the mobile phone will be the basic need of each Indian person.
The government of India is having a policy to bring zero import of mobiles by 2020 year.
Tax benefits are provided for the promotion of the mobile phone manufacturing.
Slide 3: Potential Competitors
India already has MicroMax, Lava and Xolo.
The biggest competition will come from brands like Oppo, Xiaomi, LeEco and Vivo which are Chinese brands in the Indian market.
The demand for mobile is growing day by day and there is demand for reasonably priced mobile in India in the coming days.
Slide 4: Competitive Advantages
India offers low cost labor and talented work force.
Huge domestic market
High literacy rate
Untapped potential
Expert Answer
India ranks second in the list of largest smartphone markets in the world. In 2016, there has been a very robust growth of 23% year on year in smartphone market. It shows a great potential of growth of budget smartphones in India. With a population of 1.2 billion, the penetration of smartphones is even less than 25% among this population.
Of all the phones sold in India in Q1, 2016 smartphones make 45%. And two thirds of these smartphones were LTE capable devices. With the growth of LTE penetration, Indian smartphone market is set to double with half a billion mobile phones in the next five years. This kind of growth story is what a major smartphone player like Microsoft, would not wish to be left out being a part of. So along with all the other OEMs, Microsoft is planning to set up outsourced manufacturing centers in India.
As the demand for faster internet connectivity is growing, the demand for phones with large screens is also growing exponentially. India market is mostly dominated by brands such as Samsung, Micromax, Intex, Lava, Karbonn etc. Q1 2016 has seen Lenovo and Lyf replacing Lava and Karbonn. The price war is intensifying in the sub-$75 and $150 price segments.
The primary reason why setting up manufacturing outsourced manufacturing centers in India for Microsoft mobile phones is a good idea is that although Windows mobile phone market share in India is about 1-2 % higher than other markets, the potential of growth is huge. This is because India is a market where Microsoft Windows phone is a considerable challenger to Android, and the budget Lumia phones have sold very well. So Microsoft is near to closing a deal with Taiwanese contract manufacturer Foxconn to manufacture mobile phones in India.
According to this outsourcing deal, Foxconn will produce two variants of Microsoft Lumia phones, primarily for domestic consumption as an alternative to importing mobile phones into India. As part of the outsourcing deal, Foxconn will invest $2 billion in India to set up 10- 12 factories. Microsoft’s this move of outsourcing manufacturing of Lumia mobile phones to India will give a big boost to selling its windows phones in India.
