Chinese company Spreadtrum Communications to supply chips for Jio 4G featurephones

image

NEW DELHI: Reliance Jio Infocomm is readying a lowcost 4G smartphone, said the chairman of Chinese chipmaker Spreadtrum Communications, which is in talks to supply components for the handset. The Shanghai-headquartered company will supply chips for 10 million 4G featurephones by the end of the year that Leo Li said the telco will sell in India.

Spreadtrum is also looking to partner local handset makers for enabling design in India, but is unhappy with them for ceding market share to Chinese players, Li, who is also its chief executive, told ET. Li isn’t pleased also with the progress of Indian handset maker Micromax, where his company had invested $10 million for a small stake in 2012.

“Jio is looking at the lowest-costing smartphone possible, maybe 4-inch screen, and the lowest-possiblecosting 4G featurephones as well,” Li said in an interaction during his week-long visit to India.

Jio didn’t respond till press time Tuesday to an email seeking comment. Spreadtrum considers India as the most important market globally, given the volume of featurephones and the massive push behind the segment by Jio’s parent, Reliance Industries. “They’re (Jio) the only ones pushing featurephones this hard. We work very closely with Jio, we provide 4G featurephones (chips) which are the lowest costing in the world. We will be selling about 10 million devices to them by the year end,” Li said.

Mukesh Ambani-owned Jio has rocked the mobile phone market in India by launching 4G featurephones through group company Reliance Retail for a refundable three-year deposit of Rs 1,500 apiece, making the device effectively free for buyers.

While Jio brought data technology to basic phones that would only offer voice calls, it tilted the volume scales towards the lower-priced phones, forcing the market to follow suit. Companies like Lava, Intex and Micromax have since launched or announced their own 4G featurephone models, bundled in with voice call plans from local carriers.

Chinese smartphone makers Xiaomi, Oppo, Vivo and Lenovo have not gone down the 4G featurephone way, but have pushed the Indian players out of the top five rankings, and away from customer reckoning. This has Li worried. He is not only a supplier of chips to many Indian companies, but also an investor in the biggest local handset maker, Micromax.

“I’m not happy,” he said, when asked about how Micromax has performed against its Chinese rivals. “We have to see how they execute. It’s not necessary that a company does not do well just due to business environment; the managers, chief executive officers need to be careful,” he said.

Instead of investing money in India, Spreadtrum now wants to share intellectual property or technology with local handset makers to help them design and develop devices locally.

Source: Economic Times