Mobile phone maker Sony-Ericsson said Wednesday that it will begin manufacturing low-cost cell phones in India, capitalizing on manufacturing agreements made with Flextronics and Foxconn.

The company said the initial focus will be to manufacture basic color phones and mid-level music enabled phones, for local distribution, the company. Annual production in India expected to reach 10 million by 2009.

Local manufacturing in India will result in improved cost efficiencies and enable us to offer attractive products at even more competitive price points, said Miles Flint, President of Sony Ericsson.

The mobile phone firm, a venture between Japan's Sony and Sweden's Ericsson, plans to offer customized features for the Indian market, such as local content and customized keypads, in addition to competitive pricing.

With a GSM subscriber base of 105.4 million, India is one of the fastest growing mobile markets in the world. The move follows the steps of other manufacturers who aim to capitalize on the same market.

The world's second largest cell phone maker by unit-shipment, Motorola (NASDAQ: MOT) introduced its own low-cost phone to the India market in November, 2006. Its Motophone features an innovative, low-power display, using technology from E Ink Corp.

Sony Ericsson had a fourth-quarter global market share of 8.7 percent, behind Nokia's 35.2 percent, Motorola's 21.9 percent and Samsung's 10.7 percent.

In 2006, the company shipped nearly 75 million handsets worldwide.

Both Foxconn and Flextronics haves set up manufacturing facilities in India.

Japan Electronics Sony India