Taiwan-based smartphone and personal computer (PC) maker ASUSTeK says the Indian market is a priority and is even bigger than the US and China. The company plans to bring its whole supply chain to India and tie up with Indian companies for mobile ecosystem. In an interview with BusinessLine , Jonney Shih, Chairman of Asus, shares more. Excerpts:

How important is the Indian market?

We have set our priority here and have got a pretty good start. Asus has been strong in ‘how to drive the technology’ and tries to provide high-performance luxury products at a cost. The Centre has helped us to directly jump into a new way of doing business.

Even though China may be the biggest market with 450 million smartphones annually, with the US at number two with 150 million, India, with only around 100 million units, is bigger than them priority wise, as it plays a more important role from the innovation point of view.

Is it because of the population?

Population will reflect the market size. But we are focusing on the penetration rate – in India it is around 10 per cent as compared to China, with around 50 per cent.

So the Indian market has great potential. We are interested to bring some of our supply chains here. We have the intention because today branding plays an important role in infrastructure – not just the assembly of components but the whole infrastructure.

Any State or city where you have decided to set up the plant?

On a plant/facility, we may have a different alternative. Some of the alternatives are to work with another company, which is already here. For them too, we are trying to get the supply chain as they might not have a full assembly line. We are working on that idea and in may be around six months, you will be able to see our first foothold.

Will you be doing anything with Foxconn?

Foxconn is one of the partners. We are in talks with various Indian companies, but there is nothing concrete right now. We are thinking about having more of supply chain infrastructure, and not approaching just one.

What will be your initial products to be manufactured?

Smartphones of course may have earlier production than other products. We have been also aggressive towards notebooks (laptops), so that will also happen.

Where do we see Asus, in terms of investments, over the next five years?

As I said, we have high priority for India, so we are setting an aggressive goal for next year. Our goal is to get into the top four.

The key concern is connectivity for smartphones and for PC it is the productivity. We believe there will be a stable business.

For example, in India, we were initially setting up stores in different cities and even exclusive stores, to gain popularity.

We will be investing aggressively in that too. Therefore, we will push hard to drive both the businesses (smartphones and PCs).

What kind of shares are you looking for from both businesses? Will it be 50:50 in terms of revenue?

We target 60 per cent from smartphones and 40 per cent from PCs by next year. In the long run, there is a possibility of 50:50.

What kind of localisation could happen in terms of applications? How do you see the competition from Mircromax, Lava?

For local apps, we already have some partners approaching us. But, in terms of ‘Indianised’ apps, we are not there yet. We will look at local apps, and try to improve and pre-install in our devices.

The Indian market is not yet as strong as other parts of the world.

Everyone is talking about low-cost devices, especially with 4G services getting launched. Do you have something in mind?

At any stage, if there is a possibility of doing that, Asus will be always there, the reason being that cost is very important. Some companies may neglect this; that is why we never try to avoid markets like India or China.

We always believe in the challenging markets. But what kind of luxury you achieve at what cost, depends on capabilities. Therefore, we always take care of both (price and quality) during our R&D.

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