In a development that could come as a pleasant surprise to many, Indian mobile phone manufacturer Lava International is aspiring to become a leader in the sub-$150 mobile phone category. The company is raising $90 million from a US fund for investing in research & development (R&D) in this space.
To be fair to Lava, the company has been successful in bagging an order from the American telecom major AT&T for handsets priced below $200. The other Indian phone manufacturer Micromax had also been part of this order from the American carrier which came about last year following the trade war stand off between the US and China. The other two carriers Sprint and T-Mobile had also placed their trust in Lava and Micromax. That the American firms place their trust in the ability of the Indian manufacturers to deliver the products to their satisfaction is a laudable situation in itself. Besides these mobile phones, Lava has obtained an order from General Electric to make handheld devices meant for medical use as well.
Possibly, these US contracts would have strengthened its case with the GEM Global Yield Fund which is now buying American depository receipts from Lava to the extent of $90 million (â‚¹630 crore). The funds will be made available to Lava through a Share Subscription Facility, in tranches.
This information will also come as a boost to the company since their manufacturing capacities have been lying largely unutilised for the past couple of years. Many Chinese brands have entered the market and flooded it with cheap alternatives in the smartphone space. Feature phone sales are quite less in comparison. Brands like Xiaomi, Oppo, Vivo etc. have been quite active in the Indian market.
The company seems to have carried on with its R&D activities which may be bearing fruits now.