IT & ELECTRONIC CLUSTER IN CHHATTISGARH
INTRODUCTION
What is Electronics Sector?
The electronics sector produces electronic equipment for industries and consumer electronics products, such as mobile devices, televisions, and circuit boards. Industries within electronics include telecommunications, equipment, electronic components, industrial electronics, and consumer electronics. Electronics companies may produce electrical equipment, manufacture electrical components, and sell items at retail to make their products available for consumers.
Electronics industry is the world’s largest and fastest growing industry and is increasingly finding applications in all sectors of the economy.
“It is the easiest time in Indian history to start and grow a company in India and the government is keen on involving tech and ESDM sector.”
- The most profitable sector within electronics, the semiconductor industry, has grown to become worth more than $400 billion globally.
- These industries are growing rapidly as a result of increasing demand from emerging market economies.
- Electronics sector growth is greatly accelerated by increasing consumer spending around the world. As developing economies grow, consumer demand for electronics also increases.
- Indian technology and electronics sector, including telecom has a potential to contribute no less than a fourth or 25% to India’s GDP, with $1 trillion of opportunity in next five to seven years.
- The government, as a part of ambitious Make in India initiative has facilitated establishment of 159 electronics systems design and manufacturing (ESDM) production units in the country last year.
- The government has also set up Electronic Development Fund (EDF) and Innovation Fund (IF) to help accelerate electronics manufacturing and spur innovations in the country.
India-Hub of Electronics and Hardware Manufacturing
- India has become one of the favored destinations pertaining to the electronics and hardware.
- The growth of the Electronics and Hardware Industry in India due to the favorable conditions for the electronics industry.
- The Government policies are also helping the growth of the electronics and hardware industry.
- The Policies pertaining to investments are attracting foreign players in this industry.
- The manufacturing of the semiconductor is the most important area pertaining to the electronics and hardware industry.
The semiconductors are used in all kinds of electronic equipments such as cell phone, personal computers, laptops, other implementations in automobile sector, medical equipments, etc - India Semiconductor Association (ISA) is the apex agency pertaining to the semiconductor companies and chip design firms in India
OPPORTUNITY
From just two mobile phone manufacturing units in 2014 to 268 mobile handset and accessories manufacturing units in 2019 which has led to 95 per cent of mobile phones sold in the country being produced domestically, the star in India’s “Make in India” story is indeed shining.
In fact, India is today the second-largest mobile phone manufacturer in the world after China.
“India has achieved tremendous success in mobile phone and component manufacturing in the last four years with more than 95 per cent of domestic consumption now being produced in India,” Pankaj Mohindroo, Chairman, India Cellular and Electronics Association (ICEA), told IANS.
According to a survey conducted by mobile industry body ICEA, the 268 mobile handset and accessories manufacturing units employ about 6.7 lakh people.
So today the phones that most Indians hold in their hands are made in India, thanks mainly to schemes such as Modified Special Incentive Package Scheme (M-SIPS) to provide financial incentives across the ESDM value chain to compensate for cost disability in manufacturing and Electronics Manufacturing Clusters (EMC).
Due to the focus on “Make in India” and “Digital India” programmes, Uttar Pradesh has emerged as the new hub of mobile manufacturing in the country over the past few years.
In July 2018, Samsung launched the world’s largest mobile factory in Noida. The new facility was set up with the aim of doubling its capacity for mobile phones in Noida from 68 million units a year to 120 million units a year, in a phase-wise expansion to be completed by 2020.
Besides Samsung, most Chinese smartphone makers which now dominate the Indian market – Xiaomi, Oppo and Vivo — also produce their phones in the country. Apple has already started the assembling of iPhone 7 at its supplier Wistron’s facility in Bengaluru.
Production of cellular mobile handsets in volume terms reached 225 million units in 2017-18, as compared to production of 60 million units in 2014-15.
This will include targeted production of one billion mobile handsets by 2025, valued at Rs 13 lakh crore, including 600 million mobile handsets valued at Rs 7 lakh crore for export.
India currently has over 450 million smartphone users. The number of smartphone users in the country is expected to reach 859 million by 2022, according to an ASSOCHAM-PwC joint study.
Read more at: economictimes.indiatimes.com
Reasons Why Indian Smartphone Companies Went Out of the Business.
1. Innovation:
- Indian smartphone companies didn’t innovate anything which is comparable with Chinese companies.
- Micromax, Lava and Karbonn had enough money at that time to invest on manufactring plants, research and development.
- They could have start their own software companies which develops the inbuilt innovative features. But, these companies did nothing.
2. Focusing on PROFITS only:
- Most Indian smartphone brands were operating on 20-30% profit margin. That’s a very huge compare to Chinese companies.
- Indian companies just wanted to make money as quick as possible. But, this idea failed completely.
- Xiaomi is still making less profit because they want consumers to love their product.
- All the Chinese brands are operating their business on only 5% profit margin.
3. Low Quality Products:
- Chinese brands such as Xiaomi, Oppo, Vivo and OnePlus started providing high-quality products at cheaper rates.
- On the other side, Indian companies wanted to make more money by taking large profit margin. Also, the quality of Indian brands were so poor compared to Chinese brands.
4. Make in India:
- We cannot blame the initiative taken by the government. Because of make in India, Chinese companies started creating assembling plant in India.
- That decreases tax and transportation cost of Chinese companies.
- Indian brands didn’t understand this fact. They continued manufacturing phones in China.
5. Chinese Manufacturing:
- The harsh reality of Indian smartphone brand is they didn’t had any kind of manufacturing plant.
- All the companies were buying phones from Chinese manufacturers. And then by giving the branding to the phones, they were selling phones in India.
Notably, Micromax launched a smartphone called Micromax Dual 5 in India a couple of months back that is a copy of Qiku 360 Q5 a Chinese mobile. Additionally, Micromax launched another mobile, Yu Yureka black, a copy of Wiko U Feel Prime.
6. Reliance Jio 4G:
- All Indian smartphone brands were expecting the arrival of 4G in India by 2018.
But, Reliance Jio rapidly spread 4G connectivity in the country.
Hence, Indian companies were not ready for 4G.
FAVOURABLES & ADVANTAGES
WHY?
- Entering in smartphone business will increase our Brand Value easily and quickly.
- It is the base of IT industry.
- We have done enough research and have complete knowledge of this business.
- Many of our projects are inter-linked with the smartphone business.
- It will create more job opportunities than any other business in present business scenario.
FAVOURABLES
- India today is considered to be one of the major forces in the global economic market.
- India became the world’s’ fastest- growing market for mobile applications in 2018.
- Last year, India overtook the United States to become the world’s second-largest smartphone market, after China.
- Statistics suggest that there will be 780 million connected smartphones in 2021, compared with 359 million in 2016, according to a study by Cisco Systems.
- India’s smartphone market grew 14 percent with total shipments of 124 million units in 2017, the fastest pace of growth among the top 20 markets, according to International Data Corporation (IDC).
- Free voice services and cheap data plans have increased the number of phones in India.
- India accounts for 30 million (300 lakh) smartphone purchases every quarter, and this percentage keeps increasing several times a year.
- In China, “there is the Trump risk and there are other risks – currency risks, overall wage appreciation risk and so on.
- Thanks to INDIA’S huge market base and fast-developing spending habits of middle-class Indians.
- Low labour costs.
- Digital wave.
- Scope for sustainable business.
- Presence of a startup ecosystem.
- Business-friendly laws.
- Youngsters in India.
C: IBEF.ORG
ADVANTAGES
- Boost in Economic Growth: The make in India campaign will lead to an increase in exports and manufacturing. An increase in exports will improve the economy and India will be transformed into a global hub of manufacturing through global investment using the current technology. Manufacturing will also boost India’s economic growth and GDP.
- More Job Opportunities: It will lead to the creation of many job opportunities. Around ten million people are expected to get jobs. An increase in investment will bring employment opportunities for the skilled labor force and this will form a job market.
- Attract More Foreign Direct Investment (FDI): It will welcome more FDI. Since the government had promised to improve the ease of running businesses in India, it is going to attract many FDI.
- Fortify the Rupee.
- Investment in India: Through Make in India Project more companies are looking to set up factories, a unit known as “Invest India” is in the process of being put to place. This unit will be under the department of commerce and will be available any time to make it easy to carry out regulatory clearance within the shortest time possible ensuring that businesses are run in India easily.
- An Indian company competing in the market.
- Youngsters will not move abroad, they will not even have to move to another city/state, all things they can get in their own city/state.
- We don’t have to pay to foreign brands, we should be paid by them.
- Exporting rate will increase.
- Improved Capital Flow in the market.
THE PROCESS
Why Assemble or Make Phones in India?
Smartphones still not ‘made’ in India; key parts still imported from China. It is mostly an assembly of imported parts (PSB, Screen, body, etc.) from China and other countries like Taiwan.
Also, You need to pay an import duty of 12.5% when you import a full smartphone from China. On the other hand, if you set up an assembly plant in an SEZ (Special economic zone); you get tax soaps from the Indian government and pay only 1% tax.
But is it bad to assemble phones in India?
In fact, It is good for the economy, as there is employment generation, and help create ancillary industries.
But the bottom line is still the same; the parts are imported from China, Taiwan, Korea or other countries. As they have manufacturing plants for processors, display panels, motherboards, Ram and other components.
OUR STRATEGIES
The strategies in the policy include:
POLICIES OF THE GOVERNMENT
- The National Policy on Electronics 2012 (NPE 2012) envisioned creating a globally competitive Electronics System Design and Manufacturing (ESDM) industry to meet the country’s needs and to serve the international market.
To offset disability and attract investments in Electronic manufacturing, Modified Special Incentive Package Scheme (M-SIPS) was notified on 27.7.2012.
The scheme is available for both new projects and expansion projects. The scheme provides capital subsidy of 20% in SEZ (25% in non-Special Economic Zone) for units engaged in electronics manufacturing.
- Greenfield EMC is an undeveloped/underdeveloped geographical area, preferably contiguous where the focus is on development of basic infrastructure, amenities and other common facilities for the ESDM units.
- To promote investment in the Information Technology (IT) / Information Technology Enabled Services (ITES)/ Electronic Hardware Manufacturing (EHM) units, the Government of India had notified policy on Information Technology Investment Regions (ITIRs) in May 2008.
- As part of the “Digital India” agenda of the Government, it is envisaged to develop the Electronics System Design and Manufacturing (ESDM) sector to achieve “Net Zero Imports”. Setting up of Electronic Development Fund (EDF) is one of the important strategies which would enable creating a vibrant ecosystem of innovation, research and development (R&D) and with active industry involvement.
Smartphones still not ‘made’ in India; key parts still imported from China.
REF : https://www.businesstoday.in/technology/news/smartphones-still-not-made-in-india-key-parts-still-imported-from-china/story/303704.htmlIndia has recently toppled Vietnam to become the second largest mobile phone maker after China. However, India still relies on imported parts from China for the assembly.
In July, Korean smartphone maker Samsung set up the world’s largest mobile phone factory in Noida. Recently, China’s Vivo said it will invest Rs 4,000 crore over the next four years to set up another factory in Uttar Pradesh. “Till March 2018, Vivo invested over Rs 200 crore more to set up a surface-mount technology unit for PCB assembly,” said Vivo India’s brand strategy director, Nipun Marya.
Vivo has reportedly said they are keen on expanding into component making soon. Fellow Chinese player and rival Oppo is also supposedly holding talks with component makers about opening units here for its upcoming industrial park in Greater Noida. The expansions are sure to draw in more Korean, Chinese and Taiwanese component makers to set up shop in India and kick start a components ecosystem as there is already increasing interest from them, smaller manufacturers say.
Assembly & Manufacturing
Over the last four years, the country has seen a massive boom in the number of mobile manufacturing units.
In fact, this industry today is amongst the top five employment opportunity generators in India, creating over four million (40 lakhs) direct and indirect jobs over the next few years, according to Randstad India.
The Manufacturers’ Association for Information Technology (MAIT), claims that the newly launched goods and services tax regime favours IT importers over small domestic producers.
HOW COMPANIES MANUFACTURE
Xiaomi’s combination of well-spec’d phones and low price tags drove the company to over 60 million sales last year. That progress saw it replace Samsung as China’s top-selling smartphone company and become the world’s third top selling phone maker in the process.
Most smartphone companies, including big players like Xiaomi, Huawei, and Samsung rely on ODMs (Original Design Manufacturers) for designing and manufacturing their smartphones.
What’s an OEM?
OEM stands for “original equipment manufacturer”. In the smartphone industry, this term refers to companies who manufacture their own phones in their own factories.
Some examples of Android OEMs are Samsung, LG, and NUU Mobile.
What’s an ODM?
ODM stands for “original design manufacturer”. These companies also own factories where they manufacture phones (often in huge quantities).
Then the ODM sells these phones to other companies, who re-brand the devices with their own names and logos.
This is often referred to as “white-labelling”.
ODMs take care of the overall design and specifications to manufacture products that are tailored to customer requirements. This way, the companies don’t have to worry about factories or manufacturing, thereby saving cost as well as shortening the product development cycle.
Foxconn is the major manufacturer of all.
SOME OTHER MANUFACTURERS (ODM)
Huaqin
Wing tech
Holitech Technology
Wistron
Today 99% of displays and other spare parts for smartphones, tablets, laptops, etc. are made in China.
The PRC has succeeded in creating all necessary conditions for technological advance of an unthinkable scale.
Logical enough, all most popular manufacturers of smartphones, as well as other consumer electronics & portable equipment have built factories in this country.
Companies like XIAOMI, REALME, and ONEPLUS etc. sell majority of the phones online whereas SAMSUNG, VIVO, OPPO etc. rely majority on offline market though they have started selling their products online as well.
Current Successive Business Model
COMPANY
OUTSOURCING THE COMPONENTS
ASSEMBLING AT ODM (Foxconn…)
INSTALLING SOFTWARES (OS, Camera…)
SELLING (Online or Offline) (Flipkart, Amazon…)
SUPPORT
KEY RESEARCH STEPS FOR STARTING SMARTPHONE
COST OF COMPONENTS ( QUOTATIONS )
PATENT VERIFICATION & LICENSING.
LOGISTICS RESEARCH
MARKETING RESEARCH & OPPORTUNITIES
SELLING RESEARCH
STATS FROM COMPANIES
SELLING FIGURES FROM E-COMMERCE WEBSITES
SOFTWARE DEVELOPMENT QUOTATIONS
GOVERNMENT SUPPORT
TAX REDEMPTIONS
LAND LOCATIONS & FEASIBILITY
UNDERSTANDING INVESTMENT
DUMMY MODELS
SURVEYS
TESTERS (YOUTUBERS, TECH EXPERTS)
Seed Funding | Series A Funding | Series B Funding
Seed money is used to fund the earliest stages of a new business, potentially up to the point of launching your product.
Seed funding is the first official equity funding stage. It typically represents the first official money that a business venture or enterprise raises; some companies never extend beyond seed funding into Series A rounds or beyond. Seed funding is used to take a startup from idea to the first steps, such as product development or market research.
Seed funding may be raised from family and friends, angel investors, incubators, and venture capital firms that focus on early-stage startups. Angel investors are perhaps the most common type of investor at this stage.
Series A funding, (also known as Series A financing or Series A investment) means the first venture capital funding for a startup. The Series A funding round follows a startup company’s seed round and precedes the Series B Funding round.
PROCESS AFTER SEED FUNDING
Why our smartphones?
- Modular Smartphone
- Palladium Made Glass
- 20X Zoom
- -20 X Zoom
- Pop Up Speakers
- IR SENSOR + Camera in a punch hole display
- Troubleshooter
- Direct Customer Support & Security Concerns
- Gaming
- Satellite Tracking
- Different OS
- Radiation
WHY WE NEED FUNDS?
RESEARCH COSTS
TRAVELLING EXPENSES
RECRUITMENT
OFFICE EXPENSES