Reliance Jio and Google had announced their partnership last year to come out with a new low-cost smartphone in India. The smartphone would have catered to the needs of the Indian market, which wants the best of technology but is also price sensitive. A report from Bloomberg suggests that Jio is facing troubles with the manufacturing and production of its low-cost smartphone. The primary reason behind that is the issues in the supply chain.
Supply Chain Issues Increase Cost of Manufacturing for Reliance Jio
As per the publication, Reliance Jio had initially thought of making hundreds of millions with its low-cost smartphone in partnership with Google. But the target figure has now been brought down to a fraction of the earlier envisioned numbers. This is because of the supply chain issues. The cost of the materials and core parts of the smartphone have shot up. Because of the COVID-19 pandemic, the slowdown in production of parts and travel restrictions, the company isn’t able to meet the production volume it thought it would. This is resulting in increased costs of making the smartphone. A person aware of the matter told Bloomberg that the prices of the display have shot up by 40% and the microprocessor that goes into the smartphone battery now costs 9 cents instead of the earlier 5 cents. Further, the shipping costs for the components have also increased. Before the pandemic, shipping a 20-foot container cost $800 from China to India. But now, the same costs $3,600.
Google and Reliance Jio Have Cultural Differences
Google and Reliance Jio have very different methods of approaching issues and planning for products. This has become evident with the cultural differences surfacing between the companies recently. Jio believes in the top to down model while Google believes in more of self-direction. While Google likes to plan things months in advance, Jio works almost instantly, making late-night calls. This might force Jio to delay the launch of the smartphones or launch it for a price that it didn’t want to. Fans of Reliance Jio are waiting for the low-cost smartphone that it is planning to launch in India, but things are not looking good since there is nothing Jio can do about the supply chain issues.
