NEW DELHI : Television makers in India are acquiring key software licences for value addition in domestic manufacturing of TVs to take on Chinese companies who dominate the global market.
Such licences are key for contract manufacturers in the country to graduate from original equipment manufacturers (OEMs) to original design manufacturers (ODMs). While the former is responsible for producing pre-designed products, the latter owns the design. Manufacturers in China, which now supply to some of the world’s largest electronics companies, started as OEMs decades ago.
On Monday, Dixon Technologies, one of India’s largest contract manufacturers, announced a pact with Google to acquire the licence for Android and Google TV platforms. Dixon isn’t the first though. In July 2021, Noida-based Videotex International Pvt. Ltd became the first manufacturer to obtain the licence for LG’s webOS platform for TVs in India, while Super Plastronics Pvt. Ltd (SPPL), which is also based in Noida, had acquired a licence for Google TV back in 2020.
Videotex makes TVs running on Android for brands like Lloyd, Hyundai, Realme, Hisense and Toshiba. It also has an in-house brand called Daiwa, and has onboarded another 15 brands to make TVs running on webOS. Dixon, said in an exchange filing on Monday, that it can produce up to six million TVs a year. Avneet Singh Marwah, chief executive of SPPL, said it will start supplying Google TV-based products to more brands by this year-end. It already makes TVs under the Kodak and Thomson brands, among others.
So far, TV brands would have had to deal with ODMs in China, who had exclusive licences to platforms like Android. This means that the Indian OEMs would have to pay the Chinese ODMs for all key components like open-cell displays, LED lights and cabinets. ODMs have partnerships with chip makers too, which means that the main board powering a TV goes through them as well. Companies like TCL, Skyworth and BoE Technology Group are some of the key Chinese ODMs.
View Full Image
Mint
By developing into ODMs, the Indian companies are essentially looking to handle a larger portion of the manufacturing process. “When you have the licence, then you’re sourcing everything yourself, using your own materials etc. Otherwise, you have to buy everything from them (the Chinese ODM). So, first you’re buying from an ODM in China, then paying me (the factory) and then reaching the customer,” said Arjun Bajaj, director of Videotex.
Marwah noted that India currently has a total TV production capacity of around 12 million units a year, which is expected to rise as exports grow. He also noted that the country still has nearly 200 million cathode-ray tube (CRT) TVs in use, which are yet to be upgraded to Light Emitting Diode (LED) and smart TVs.
To be sure, China has nearly threefold of India’s TV manufacturing capacity. However, geopolitical tensions and covid-related lockdowns have hit China’s capacity. An industry executive, requesting anonymity, estimated China’s capacity at 40 million smart TVs in 2021, which is expected to fall to 32 million this year, and may drop further to 28 million by December-end.
Building a presence in the design-led manufacturing sector has been among the key asks from industry veterans for a long time. While the government has offered a production linked incentive (PLI) scheme for various sectors,it has not been offered to TV makers.
Catch all the Industry News, Banking News and Updates on Live Mint.
Download The Mint News App to get Daily Market Updates.
More
Less
Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.
Post your comment
