Xiaomi Partners With Optiemus To Make Wireless Audio Products in India, Plans To Source 50% Components Locally

Smart devices maker Xiaomi plans to source half of the components used in smartphones from India in terms of value by 2025, a senior official of the company said on Monday.

Xiaomi India President Muralikrishnan B also announced the company's foray into hearables category which will be produced at Optiemus Electronics Limited (OEL) factory in Noida.

"We want to broaden and deepen our local sourcing. Already 35 per cent of the non-semiconductor BOM (bill of material) is sourced locally. We will consider sourcing semiconductors when it is possible to do it here. We will continue to double down on it. By exit 2025, we hope to increase local value addition to 50 per cent of BOM locally," he said.

He said that the company will look at continuing increasing sourcing in percentage terms and look for sourcing more variety of items.

"By the end of this year, we will be working on sourcing smartphone display, fingerprint sensors locally. By 2025, we will have," Muralikrishnan said. Xiaomi at present has partnership with Indian electronic manufacturing services companies Dixon Technology and Radiant for smart television, Lite for TV remote and it has partnered OEL for manufacturing neck band which it plans to launch in June.

"We are entering into a new category, for partnering and sourcing locally, which is hearables. We chose Optiemus Electronics which by all conclusions can be considered to be a domestic champion in India. In hearables and wearable categories, they have built very good capabilities," Muralikrishnan said.

When asked about the continuous decline in shipment of Xiaomi smartphones, Muralikrishnan said that 2022 was a tough year and the company is now looking at selling reasonable volume with profitability rather than chasing volumes.

He said that smartphones below Rs 10,000 apiece have been adversely impacted because people with low income have been badly hit by inflation.

"We might have to wear a fresh thinking hat. Things that have worked in the past may not work in future. Business needs to make money. Last year was tough. Our approach for 2023 is of a leaner portfolio, a cleaner portfolio, clear choices at every price point. There is great opportunity in 5G, specially in the Rs 10,000-15,000 price band," Muralikrishnan said.

Xiaomi plans to build capacity and capability in the offline channel this year because it still accounts for 60-65 per cent of smartphone sales in the country, he said.