Honor Gears Up For India Relaunch, To Begin Local Manufacturing Next Year

Chinese smartphone major Honor is reportedly gearing up for a relaunch in India in partnership with a local company.

Honor has signed a licensing deal with Gurugram-based HonorTech, a joint venture between former Realme India top executive Madhav Sheth and Honor India distributor PSAV Global, to manufacture smartphones in India, news agency PTI reported.

HonorTech will reportedly invest INR 1,000 Cr to set up operations for the Chinese smartphone brand’s reentry in the country. A major chunk of the infusion will go towards establishing software and hardware teams as well as to establish service centres in the country. 

As per a Reuters report, the deal centres around an ‘agreed-upon cost’ linked to the transfer of technology and hardware. 

“Their global expertise will be transferred to us. Honor’s global team will come to India to help with this know-how transfer. They will work as an ODM to us, while the partnership will help them expand globally,” Sheth told the publication.

Under the pact, the duo will launch three ‘mid-range’ smartphone models under the Honor brand by as early as September this year. These smartphones will likely sell in the price range of $100-$1,000, including foldable phones, and will initially be imported. 

As per Sheth, all Honor-branded smartphones will eventually be manufactured in the country via a ‘PLI (production linked incentive)-approved domestic contract manufacturer’ by 2024.

Meanwhile, HonorTech expects to rake up a revenue of INR 10,000 Cr by December 2024 and is eyeing a 5% market share in the smartphone market by the end of 2022. As per Sheth, the partnership will generate 4,000 jobs in the country across operations,retail and R&D by the end of the next calendar year.

The Chinese original equipment manufacturer’s (OEM’s) reentry into India comes nearly a year after it pulled the plug on its India smartphone operations as geopolitical tensions raged on between New Delhi and Beijing. 

“The biggest challenge with the (Indian) government in the past was how can a (Chinese) brand be accountable in India?” Sheth told Reuters. 

In partnership with HonorTech, the Chinese brand is expected to see some tailwinds as it regathers its India operations, alleviating a majority of the concerns of the Indian authorities. 

Besides, this is potentially the first major development after the Centre reportedly directed Chinese smartphone makers to partner with local ‘equity partners’ to operate in India. Meanwhile, the move is expected to bring another Chinese player back to the country but with better data safeguards in place. 

Honor will compete with other smartphone giants operating in the country such as Samsung and other Chinese competitors Xiaomi, Oppo, Vivo and Realme. 

The development comes at a time when other Chinese companies have been under regulatory scrutiny in India for alleged money laundering and tax evasion. While Xiaomi has shut some of its services in India, others have steadily offloaded their investments in Indian startups. 

Meanwhile, Chinese and other global OEMs continue to make a beeline for India owing to the lucrative PLI schemes and have scaled investments in manufacturing facilities in the country. While Xiaomi has partnered with a local player to produce wireless audio products, tech major Apple has scaled up its production to billions of dollars in India. 

With much at stake, it remains to be seen what kind of impact the relaunch creates in India. Meanwhile, the reentry could ramp up competition in the already heavily populated Indian smartphone space.