Reliance Jio is in advanced talks with American tech manufacturer Flex to locally produce around 100 million low-cost smartphones, according to The Economic Times.
The move is seen as an attempt by the Mukesh Ambani-led company
to rapidly expand its market share by attracting millions of feature phone users to join Jio's 4G network. ET reports that Jio's gargantuan order of 100 million smartphones has prompted Flex "to negotiate some tax benefits with the government" so as to save on taxes and be able to produce highly affordable smartphones.
to rapidly expand its market share by attracting millions of feature phone users to join Jio's 4G network. ET reports that Jio's gargantuan order of 100 million smartphones has prompted Flex "to negotiate some tax benefits with the government" so as to save on taxes and be able to produce highly affordable smartphones.
Currently, Flex has a capacity to manufacture 4-5 million handsets per month at its factory in the Special Economic Zone (SEZ) near Chennai. Flex is negotiating with the government to sell the devices at free trade agreement rates.
If the government allows Flex to sell these handsets without duties, Jio will be in a sweet spot to offer these smartphones at affordable prices - a key parameter to attract the country's 500 million feature phone users.
However, along with pricing, Jio will also have to offer attractive services and data plans to rapidly bring 2G subscribers into its 4G network.
