Dixon Technologies, a domestic contract manufacturer, is set to manufacture Alphabet Inc's premium Google Pixel 8 smartphones locally. According to a report, the company has commenced trial production, with the first batch of India-made phones expected to hit the market by September. Last October, Alphabet revealed plans to produce Google Pixel smartphones in India, making it the final major global smartphone brand to join the country's manufacturing initiative.
Dixon’s production capacity for Pixel smartphones will reach 100,000 units monthly, with an estimated 25-30 percent designated for export, as the company embarks on a renewed effort to capture market share in India, the world’s second-largest smartphone market. The report quoted executives as saying that the Pixel 8 model comprises nearly 80 percent of all Pixel sales in India. This move follows Dixon's subsidiary, Padget Electronics, securing an agreement with Taiwan’s Compal Electronics to manufacture phones for Compal’s clientele.
Padget, a participant in the government's production-linked incentive (PLI) program for mobile phones, has been selected to manage the production of Pixel devices and has presented Google with competitive production rates. At the recent earnings call on May 15, Dixon Technologies' managing director, Atul B Lall, announced that the company will commence smartphone manufacturing for a global brand in partnership with Compal by September.
As per the executives, Alphabet, following Apple's footsteps, plans to incrementally scale up its production activities in India. Dixon could potentially produce upcoming Pixel models alongside older iterations domestically. Moreover, Alphabet is considering involving a secondary manufacturing partner in India. Reports indicate that Google has been in talks with Foxconn regarding the manufacturing of Pixel smartphones within the country.
Analysts suggest that Google's move is motivated in part by the aim to gain a foothold in the Indian market. In the segment where Pixel smartphones are priced above Rs 50,000, consumers typically lean towards Apple's iPhones or Samsung's Galaxy devices. Additionally, imported smartphones are subject to a 22 percent import duty, leading to elevated price points.
According to the data, Apple maintained a dominant position in the Rs 50,000-plus smartphone segment in 2023, commanding a 68 percent market share, trailed by Samsung at 21 percent. Meanwhile, all Pixel models combined held a mere 1 percent share. However, there was a notable 147 percent increase in Pixel shipments to India during the same year. Currently, a significant portion of iPhone 15 and 15 Plus models, along with earlier generations of Apple devices sold in India, are manufactured domestically, as are Samsung's high-end models. The report, quoting Shilpi Jain, a senior analyst at Counterpoint, highlighted that locally produced Pixel devices will cater to both domestic and international markets.