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Lava re-enters smartphone space; investing Rs 800 crore to expand operations, Telecom News, ET Telecom


NEW DELHI: Home-bred handset maker Lava International made its comeback into the country’s smartphone market, backed by a Rs 800-crore investment plan to expand its local manufacturing and designing capabilities, and is aiming to bring 5G devices to the country for under Rs20,000.

The company has enhanced its production capacity to 30 million smartphones and 45 million feature phones and is further looking to expand it. It has also shifted its research and developing and design facility from China to India.

“We are targeting Rs 6,000-Rs 10,000 smartphone range and will soon enter the mid-price range…5G shift is happening in the market and we will be there,” Sunil Raina, President and Business head, Lava International, told ET. “We will launch 5G phones in the Rs 15,000-Rs 20,000 price segment.”

Lava is targeting 5% smartphone volume share by the end of this calendar year in a market dominated by Chinese players, led by Xiaomi, Oppo, Vivo and Realme, and Korea’s Samsung. The Indian company, co-founded by Hari Om Rai, though plans to initially target the under Rs10,000 space, which is dominated by Xiaomi, with other rivals being Realme, Motorola, Nokia, Samsung and Transsion Group brands Itel and Tecno.

Lava follows another home-bred brand Micromax in re-entering the smartphone segment. Over the last five years or so, Indian players had been practically pushed to the fringes mainly by the moneyed and aggressive Chinese players. But backed by the government’s production-linked incentive (PLI) scheme, the likes of Lava and Micromax are trying to regain a foothold in their home market through their own brands, as well by making devices for other brands.

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“Lava is one such OEM (original equipment maker) which has the capacity to sustain and take make in India vision in the right direction with design and IP capabilities. But, they will have to fight it big to make a dent in the market with aggressive strategy,” said Faisal Kawoosa, analyst at TechArc.

Thursday, Lava launched the world’s first customisable smartphone along with four other models.

“We are now developing phones end-to-end. We have control over software, designing and manufacturing, which allows us to give value to customers,” Raina said.

On the ongoing shortage of components, he said that the situation is improving for the entire industry. “The chipset situation is easing out. However, there are shortages of displays and ICs (integrated circuit). But, we are prepared.”

Lava International, which is known for its vast offline distribution network, is now focusing on the online channel with its partnership Amazon. It will also start selling handsets through its own ecommerce website.

Raina said that the company is strengthening its manufacturing operations to support its smartphone business and for contract manufacturing business contracts under the PLI scheme.

Lava, along with Bhagwati (Micromax), Padget Electronics, UTL Neolyncs and Optiemus Electronics, has been approved under the Production Linked scheme (PLI) by the Indian government. All local players have proposed production output of Rs 1.25 lakh crore over the next five years.

It has started making Nokia branded smartphones and is in talks with Motorola for similar tie-ups, ET reported.

Lava is also actively looking for western companies as part of its push into contract manufacturing. It has been working with US companies like AT&T and General Electric (GE) to provide them with affordable smartphones.

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