Reliance Jio teamed up with Google last year to launch an affordable smartphone in India. The plan, as per a report, is delayed due to supply-chain issues. In its latest report, Bloomberg says that the company is “facing headwinds, with supply-chain disruptions and rising component prices suppressing production volumes”. Bloomberg cites people familiar with the matter in its report.
Mukesh Ambani-owned Reliance Jio has announced to hold its annual general meeting (AGM) on June 24. The telco is expected to announce the Google co-branded phone at the event. While the official debut will be made by August or September, sources say.
The delay could be a setback for Jio and its manufacturing partners. This considering the fact that Xiaomi, Oppo and OnePlus have already established local manufacturing facilities as they pursue consumers to upgrade from basic 2G devices.
Reliance and Google have been collaborating on the affordable Jio smartphone. They have developed separate hardware and software for the device. “But sourcing the components has proved a hurdle after the coronavirus pandemic boosted demand for electronics globally and led to shortages”, the Bloomberg report says.
Amongst other challenges facing the smartphone’s launch, cultural differences between Reliance and Google have also emerged as a hurdle, the report says. While the Indian telco relies on a top-down operating model, the US company engineers are ‘more self-directed’. “That’s resulted in last-minute decision making and calls in the middle of the night, in contrast to Google’s usual preference for planning things months in advance”, it states.
“A meeting between Reliance and Google teams as late as last week, a mere fortnight before Ambani’s planned unveiling, failed to yield any finality on the hardware specifications, the people said. Vital parts like displays and chipsets are in short supply and taking longer than usual to procure, bringing uncertainty to the decisions over hardware choices”, says the Bloomberg report.
Time to procure hardware material has also doubled from 30 to 45 days earlier to 60 to75 days. This is mainly attributed to the shortages in China which is the major producer as well as supplier of smartphone components globally.
Prices of the components have risen too. A microprocessor cost is said to have nearly doubled to 9 cents from 5 cents. Similarly, display prices have reportedly shot up by 40%. Delivery times for surface mount technology machines that can assemble thousands of smartphone micro-components an hour. The time has reached six months, compared with 45 to 60 days as recently as January, several people said.
Adding to the woes are the soaring shipping costs that have increased to $3,600 for a 20-foot container from China to India. The charge was $800 in the pre-pandemic period.