New Delhi, May 22 (KNN) Alphabet Inc., the parent company of Google, has entered into an agreement with Dixon Technologies, a leading Indian contract manufacturer, to produce its premium Pixel 8 smartphones locally in the country.

According to industry sources, the first batch of Made-in-India Pixel 8 devices is expected to hit the market by September, following the commencement of trial production.

This move marks a significant milestone for Alphabet, as it was the only major global smartphone brand that had not participated in the Government of India's "Make in India" initiative for smartphone manufacturing. The company had announced its plans to locally produce Google Pixel smartphones in India in October of the previous year.

Dixon Technologies' manufacturing capacity for the Pixel 8 is projected to be 100,000 units per month, with 25-30 per cent of the production designated for export markets. The Pixel 8 model accounts for nearly 80 per cent of all Pixel smartphone sales in India, as per industry executives.

The decision to locally manufacture the Pixel 8 in India is part of Alphabet's strategy to gain a foothold in the country's highly competitive smartphone market, which ranks second globally.

Despite several attempts, Google has struggled to capture a significant market share in the premium segment, where consumers have traditionally favored Apple's iPhones and Samsung's Galaxy devices.

Locally manufactured smartphones benefit from a lower import duty rate of 22 per cent, potentially making them more competitively priced compared to imported models.

According to Counterpoint Research, a leading market research firm, Apple led the premium smartphone segment (above Rs 50,000) in 2023 with a 68 per cent market share, followed by Samsung at 21 per cent. In contrast, all Pixel variants combined held a mere 1 per cent share, although Google's shipments to India increased by 147 per cent during the same year.

Dixon Technologies' managing director, Atul Lall, had previously hinted at the company's plans to commence manufacturing smartphones for a global brand through its partnership with Taiwan's Compal Electronics, a manufacturing partner for Google products globally.

Industry sources suggest that Alphabet has long-term plans to expand its local production in India, similar to Apple's strategy. The company may consider engaging additional manufacturing partners and potentially produce upcoming Pixel models and older devices in the country.

Counterpoint Research's senior analyst, Shilpi Jain, stated that the locally produced Pixel smartphones would cater to both the domestic Indian market and export markets.

(KNN Bureau)