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According to new research by Gartner, mobile phone production in India is expected to grow from 31 million units in 2006 at a compound annual growth rate (CAGR) of 28.3 percent to reach 107 million units in 2011. Mobile phone production revenue is expected to reach $13.6 billion by 2011 from $4.9 billion in 2006, a CAGR of 26.6 percent. The growth in production will be driven mainly by the expanding mobile subscriber base in India and favorable local government policies promoting local electronics manufacturing inIndia. At present, mobile phone production in India is dominated by the top five global handset vendors; Nokia, Motorola, Samsung, Sony Ericsson and LG. There are very few local-brand mobile phone makers with low production volumes and are typically focused on low-end and mid-range handsets. However, Gartner expects new players--local as well as global--to enter the mobile phone manufacturing market in India, aided by the global electronics manufacturing services (EMS)providers’ present in India. Ganesh Ramamoorthy, Principal Research Analyst, Gartner says,“Existing global handset vendors aswell as new entrants will outsourcetheir production to EMS vendors toreduce ‘time to market’ and achievefaster penetration for their ownbranded handsets. This will raiseEMS vendors’ share of total mobilephone production in India to nearly40 percent by 2011.” Though domestic mobile phone production currently caters mainly to local demand, over the next five years Gartner expects as much as 30 percent of production to be exported to neighbouring regions that are also demanding low-cost handsets such as Africa, the Middle East and other parts of South Asia. Ramamoorthy cautioned that India faces a key challenge as it lacks a mature component supply base to support local mobile phone manufacturing. “India’s production of vital components for mobile phones is very limited because much of it is imported. This may not be viable in the long term, especially with demand for handsets expected to grow rapidly. Therefore, establishing a reliable component supply base will be vital for the Indian handset manufacturing industry to stay competitive in both the domestic market and the exportmarket,” said Ramamoorthy. Meanwhile, an earlier research by Gartner expects total electronic equipment production in India to reach $32 billion in 2011, compared to $14 billion in 2006, a compound annual growth rate (CAGR) of 18 percent. Semiconductor consumption in India will more than double from $2.8 billion in 2006 to $7.2 billion in 2011. The growth in electronic equipment production is being bolstered by the rapidly growing demand forelectronics equipments in India. Gartner classifies electronic equipments across six broad categories: communications electronics, dataprocessing electronics equipment, consumer electronics, industrial electronics, automotive electronicsand military/civil aerospace electronics. In 2006, the consumer electronics equipment segment held the number one position with 39 percent share of the overall electronic equipment production in India. The segment is primarily driven by analog cathode ray tube (CRT) TVs and other audio and video equipment, including cassette tape recorders and players, and black-and-white television sets. It also includes electronic appliances like microwave ovens, washing machines, air-conditioners and calculators. The communications electronics and data processing electronics segment held the number two and three positions respectively with 38 percent and 12 percent of the overall electronic equipmentproduction in India, during 2006. “The growing domestic demand for electronic equipment, coupled with other favourable factors like low labor costs, large talent pool and various recent policy moves by government of India, including fiscal incentives for local hi-tech manufacturing, global electronic equipment manufacturers are finding India an attractive electronics manufacturing investment destination. This augurs well for the local electronics industry and aids the growth of semiconductor consumption in India,” Ramamoorthy added. www.gartner.com | 
