As Indonesia becomes an important smartphone market, brands rush to open factories
Kotagrosir.com – Indonesia is one of the biggest smartphone markets in the world. Emarketer believes that the nation will have over 100 million active monthly smartphone users by 2018 as it leaps other countries to become the fourth largest market. As this evolution happens, Indonesia is also set to be an important and strategic place for brands to manufacture smartphones.
Indeed, it’s happening already, and other factors are helping to accelerate the growth. Labor costs in Indonesia are relatively low. The country’s annual minimum wage is US$1,163, below China’s US$2,472. Furthermore, the Indonesian government is implementing new policies that heighten the cost to import phones, while at the same time it lowers the barriers to setting up a smartphone factory.
In 2013, Indonesia imported US$2.6 billion worth of smartphones, and that number will keep on increasing. Naturally, the government wants to convert some of that money to revenues made within the country.
A number of homegrown and overseas phone companies have set up facilities in Indonesia, while others are planning on doing so. These run the length of the supply chain, from major component manufacturers to actual smartphone brands. Here’s a list of the main players.
China-based Oppo is attacking the Indonesian market very aggressively. The company has put in US$30 million to buy an old factory on the archipelago and revamp it into an assembly plant. The facility, which will become Oppo’s first outside China, is located in Tangerang, just outside of Jakarta, and will be fully operational by mid-2015.
Oppo aims to assemble 500,000 smartphones every month from its Indonesian factory.
Haier – another Chinese brand – is mostly known in mainland China for its home appliances, but its presence in Indonesia is oriented towards smartphones. Haier is one of the producers of phones for local brand Smartfren Andromax.
Haier has put in US$1 million to expand the production line in its plant in Indonesia. The factory will soon assemble 200,000 smartphones each month.
ZTE is another Chinese manufacturer that supplies white-label smartphones to Indonesian brands. Some of its products in the archipelago include the Smartfren Andromax series and the Bolt Power phone.
ZTE claims that Indonesia is its biggest market and it plans to invest heavily by building a smartphone factory near the airport in Jakarta. However, there are no further details at this early stage.
Although the South Korean giant has repeatedly stated its interest in building a factory in Indonesia, the plan has yet to come to fruition. The latest update, from Indonesia’s indusry ministry representative, says that Samsung plans to start assembling smartphones in Indonesia this month. The report states that Samsung has brought some machinery and an R&D team to Indonesia.
Samsung is reportedly keen to produce as many as 900,000 phones per month in the plant in West Java – but it will start off with 100,000 units per month once the factory is completed.
Singapore-based Axioo has been operating two factories in the Cakung and Sunter areas of Jakarta since October 2013. The company claims that it can produce up to 750,000 smartphones and tablets each year. All of Axioo’s phones are assembled in Indonesia, though they use a number of Chinese-made parts. Axioo says that its mobiles are made up of 30 percent Indonesian components at present.
The company wants to put in more local components in the next few years.
Indonesian phone brands
This local firm is quite well known in the country for producing electronic goods such as radios, speakers, LED TVs, and refrigerators. In 2011, Polytron joined the mobile battlefield by launching its own white-label feature phones. Although Polytron already had three factories at that time, the company still sourced its phones from Chinese manufacturers.
Then in December 2013, Polytron decided to use one of its own plants to produce its feature phones. Recently, Polytron set a target to produce 100,000 feature phones and smartphones every month from its factory in Kudus in Central Java. Polytron’s first homemade smartphones will be sold this month.
Located in Semarang in Central Java, Evercoss’ factory started to operate in June 2014. Its 350 employees produce 1,500 smartphones, 1,500 tablets, and 2,500 feature phones each day, but not all of its phones are made in Indonesia yet.
At the moment, Evercoss is setting up another factory in a nearby area. This time, the factory will be able to produce smartphones components and will employ an extra 2,500 workers.
Besides Indonesia, the phone brand plans to launch in other Southeast Asian countries.
Advan has a well-established factory in Semarang which produces LCD screens, notebooks, and PCs. On top of the Rp 1 trillion (US$80.7 million) investment the company poured in to create the 3,000-square-meter factory, Advan is injecting another Rp 100 billion (US$8.1 million) to expand its production line for smartphones and tablets too.
The company aims to assemble 25,000 smartphones and 25,000 tablets each month this year. The company expects to start producing more smartphone components in the near future.
Advan hopes that it can produce its own gadgets independently from Chinese manufacturers in 2016.
Mito’s plant in Tangerang whirred into life in August 2014. The factory is set to assemble 100,000 smartphones and tablets each month. Mito currently assembles phones both in Indonesia and China.
Just like Advan, Mito hopes to produce its own smartphone components in the years ahead.
Himax is an exciting new player in the gadget industry in Indonesia as it seeks to disrupt other brands – in a manner similar to Xiaomi – with strongly-specced yet affordable phones. The company is reportedly in the midst of building a factory. In 2016, the six-hectare factory, located in Tangerang, will have a production target of 100,000 smartphones each month.
Although SPC may be the least well-known local brand in this list, the company claims that it’s already assembling about 200,000 feature phones each month in its factory in Tangerang. Injecting an additional US$1 million to its plant, SPC plans to start assembling smartphones and tablets in 2015. It is unknown how many phones the company aims to assemble every month.
Besides the 12 companies above, there are other smartphone makers that have expressed some level of interest in setting up a factory in Indonesia, such as Huawei, Asus, Lenovo, Xiaomi, and LG, at least according to Indonesia’s industry ministry representative. But those companies have not yet confirmed any plans.
The major player that everyone is waiting for in Indonesia is Foxconn. The Taiwan-based manufacturing giant has spoken publicly of its intentions to open a huge factory in Indonesia, but nothing is yet set in stone. Back in February 2014, Foxconn signed a letter of intent to invest up to US$1 billion in the next three to five years in Indonesia, but the negotiations reportedly broke down over land agreements.
Source by : https://www.techinasia.com/smartphone-market-factory-indonesia/