Xiaomi to Make Wireless Audio Products in India, Targets 50 Percent Jump in Production of Local Components

Xiaomi's Indian arm will start making wireless audio products in the country through a partnership with electronics manufacturer Optiemus in a push to further localise its operations, the company said on Monday.

Xiaomi India will make its first local audio gadget at Optiemus Electronics' factory in the northern state of Uttar Pradesh, the company said in a statement, reiterating that it was targeting a 50 percent increase in the production of components locally sourced by 2025.

The push comes as the manufacturer of the Redmi brand of smartphones recently lost out to South Korean rival Samsung as India's top smartphones company.

The company did not say what kind of audio product it will make in the Indian factory, but it is "committed to forging more such collaborations for a wider range of categories, across our product line-up."

Xiaomi, which locally manufactures most of the smartphones and TVs it sells in India, did not say when it will start making the audio products. It sells speakers, ear-buds, wired and wireless headphones in India.

The Indian government has been pushing global companies to invest in local manufacturing as a part of its vision to make the country self-reliant.

Last week, Xiaomi reported an 18.9 percent drop in quarterly revenue as consumer demand for smartphones remained weak even as the economy recovered from the COVID-19 pandemic.

After China lifted its stringent pandemic controls late last year, the country's economy has recovered but consumers are spending cautiously. China's smartphone sector saw no bounce back over the period at all. Total sales in China fell 11 percent in the first quarter of 2023, research firm Canalys reported in April. Xiaomi's sales over the period fell 20 percent

India, once Xiaomi's top market overseas, has also proved less lucrative for the smartphone maker. Total smartphone shipments fell 20 percent across all brands in the first quarter, and rivals such as Samsung have eaten away at Xiaomi's share of the shrinking market. The company has cut prices on several of its models in India and China in the hope of spurring demand.

In March, Xiaomi was reported to be overhauling its India strategy after misjudging consumer tastes in mobile phones, a costly lapse that allowed Samsung Electronics to pip the Chinese company to the top spot in the world's second biggest market for the devices.

While Xiaomi remained focused on selling mobile phones under Rs. 10,000, Indian consumers were willing to pay up for better looking models with richer features. South Korea's Samsung launched products to meet those aspirations and offered innovative financing schemes that made them affordable to most.

Those moves have helped Samsung wrest leadership of India's competitive mobile phones market from Xiaomi, with data from Hong Kong-based Counterpoint Research showing it had a 20 percent market share for the last quarter of 2022 compared to the Chinese company's 18 percent.

© Thomson Reuters 2023