Huawei Aims To Sell 10 Million Smartphones In India, Opens Largest R&D Center Outside China

BANGALORE, India -- Huawei Technology Co. Ltd. aims to sell “at least 10 million” smartphones in India over the next two to three years, the Chinese company’s top executive in India said, after opening a new campus here Thursday.

Last year, the company sold about a million handsets in India, but Huawei hopes to boost its sales this year after a partnership was struck in November with Flipkart, a major Indian online shopping company, Cai Liqun, CEO of Huawei Telecommunications India, told reporters at the new campus in Bangalore, India’s major technology hub.

“This is just the start. In just the two months we have had very good growth ... we are confident in this market that we will grow very fast,” Cai said. He didn’t immediately have details of the number of units sold through Flipkart. “We will not make low-cost phones ... we will make world-class phones for India at affordable prices,” he added.

However, Cai didn’t give details on upcoming models that might be specifically targeted at India, adding that some of these plans were confidential. Some of Huawei’s smartphones, such as the entry-level Honor Holly, and the more high-end Honor 6, are already available on Flipkart.

Huawei’s more immediate task at its new campus, which will host its largest research and development team outside China, will be to consolidate work that it was already doing in India and work toward nearly doubling its current strength of 2,700 engineers in the coming years. Worldwide, Huawei spends in excess of 10 percent of its revenues on R&D and about 45 percent of its global workforce is involved in R&D.

The Chinese networking equipment major made about a billion dollars in revenue from India last year and wants to double that by 2017. Much of that revenue currently comes from supplying networking equipment to Indian carriers such as Bharti Airtel Ltd. Smartphone sales are part of the company’s consumer business division, a unit that accounts for the second-largest share of Huawei’s revenues globally, but is a very small proportion of revenues from India.

While the company assembles phones near the southern Indian city of Chennai, it contracts much of its smartphone manufacturing out to companies such as Foxconn and Flextronics, Cai said.

The telecom market has suffered in the last few years, but is now improving. On the mobile handset front, if contract manufacturers come to India as volumes improve, that might help establish a more robust manufacturing ecosystem in the country, Cai said, adding that Huawei’s own cell phone assembly unit in India was set up in 2010 and, by last year, was supplying about half the local market demand.

Foxconn, however, is in the process of closing down its manufacturing facility in Chennai that mostly catered to the requirements of Nokia OYJ, which sold its mobile handset business to Microsoft Corp.

In Bangalore, Huawei's new $170 million R&D center, which measures one million square feet in size, is expected to work on multiple areas across business divisions, and given its location, the center is likely to focus on software development.