Sony Ericsson is joining the growing list of mobile phone suppliers that will make or have made for them handsets in India, perhaps the fastest growing market for mobile communications.
The company will start making handsets in Chennai through a deal with its global CEM partners, Flextronics and Foxconn.
The companies would not say how much they are investing in the operation or how many people would be employed at the plant.
Sony Ericsson said Wednesday (Jan.31) that initially it would make low-cost color screen and music playing handsets at the plant for local distribution that would sport customized keypads and come pre-loaded with local content. Over time the facility would be upgraded to make more sophisticated models for other markets.
Production is expected to reach 10 million units by 2009, representing around 13 percent of all Sony Ericsson phones sold in 2006.
"Local manufacturing in India will result in improved cost efficiencies and enable us to offer attractive products at even more competitive price points," said Sony Ericsson's president, Miles Flint.
He added that since it was established in India in 2002, Sony Ericsson has expanded its geographic presence with distribution partners and currently is amongst the top 3 in the GSM handset category in the country.
With a GSM subscriber base of 105.4 million, India is perhaps the fastest growing mobile market in the world.
Other major players in the Indian market, including Motorola and Nokia, also make handsets in India, many in conjunction with global contract electronic manufacturers.
In a market report last week, Strategy Analytics said Sony Ericsson was the star performer in handset shipments over the past quarter and in terms of revenues is now the world's third largest vendor, overtaking Samsung for the first time.