This Is How Xiaomi Will Keep Making Super-Cheap Phones

1 minute read
Lei Jun Attends Xiaomi Inc., New Product Beijing Press Conference
Lei Jun, chairman and CEO of China's Xiaomi Inc. presents the company's new product, the Mi Note on January 15, 2015 in Beijing, China.ChinaFotoPress—ChinaFotoPress via Getty Images
By Jack Linshi

Chinese smartphone maker Xiaomi announced Monday that it will begin assembling handsets in India as the company charges into the fast-growing market.

Xiaomi, known for its affordable but high-quality headsets, will produce its smartphones in a plant run by Taiwanese contract manufacturing company Foxconn, which agreed to spend $5 billion on research and development in state of Maharashtra, the Wall Street Journal reports.

The agreement is part of Indian Prime Minister Narendra Modi’s “Make in India” initiative, meant to transform India into a global manufacturing hub. Xiaomi, too, will benefit from tax breaks and lower inventory costs, per the Journal.

The Indian market has already proven highly profitable for Xiaomi, whose low-cost smartphones have rapidly sold out in the developing country. Other competitors, like Samsung, have also taken steps to enter the lucrative Indian market.

Read next: Why Xiaomi Terrifies the Rest of the Tech World

PHOTOS: The Rise of Mobile Phones from 1916 to Today

A German field telephone station in the Aisne department of northern France during World War I.
1916 A German field telephone station in the Aisne department of northern France during World War I.Paul Thompson—FPG/Getty Images
French singer and actor Johnny Hallyday in a scene from the film 'Point de Chute' (aka 'Falling Point').
1970 French singer and actor Johnny Hallyday in a scene from the film 'Point de Chute' (aka 'Falling Point').Keystone/Holton/Getty Images
An early mobile phone during the Iranian Embassy siege at Princes Gate in South Kensington, London.
1980 An early mobile phone during the Iranian Embassy siege at Princes Gate in South Kensington, London.Kypros/Getty Images
Bob Maxwell, general manager of Englewood-based Mobile Telephone of Colorado, places a call on FCC-approved radio frequency while driving to work.
1983 Bob Maxwell, general manager of Englewood-based Mobile Telephone of Colorado, places a call on an FCC-approved radio frequency while driving to work.Lyn Alweis—Denver Post/Getty Images
THE A-TEAM -- "The Say U.N.C.L.E. Affair" Episode 5. (l-r) Eddie Velez as Frankie Santana, Robert Vaughn as General Hunt Stockwell, George Peppard as John 'Hannibal' Smith.
1986 THE A-TEAM "The Say U.N.C.L.E. Affair" Episode 5. (l-r) Eddie Velez as Frankie Santana, Robert Vaughn as General Hunt Stockwell, George Peppard as John 'Hannibal' Smith.Bill Dow—NBC/Getty Images
Bill Clinton, Ray Flynn
1992 Democratic presidential nominee Bill Clinton talks on a cell phone while meeting with Boston Mayor Ray Flynn in a New York hotel on Sept. 25.Mark Lennihan—AP
Whoopi Goldberg during ShoWest in Las Vegas.
1993 Whoopi Goldberg during ShoWest in Las Vegas.Jeff Kravitz—FilmMagic/Getty Images
A farmer with his family sitting on a Bullock Cart and talking on a mobile Phone, in Delhi.
1997 A farmer with his family sitting on a Bullock Cart and talking on a mobile Phone, in Delhi.India Today Group/Getty Images
World Trade Center Terrorist Attack.
2001 A woman watches smoke pour out of the World Trade Center Towers in New York on September 11.Nicholas Goldberg—Gamma-Rapho/Getty Images
A rebel militiaman speaks on his mobile phone after capturing territory from government troops on March 25 2 in Ben Jawat, Libya.
2011 A rebel militiaman speaks on his mobile phone after capturing territory from government troops on March 25 in Ben Jawat, Libya. John Moore—Getty Images
A youth films the aftermath of tear gas police fired at protestors in Muhammed Mahmoud Street near Tahrir Square on November 23 in Cairo.
2011 A youth films the aftermath of tear gas police fired at protestors in Muhammed Mahmoud Street near Tahrir Square on November 23 in Cairo.Peter Macdiarmid—Getty Images
Audience members take pictures of President Barack Obama at Florida Atlantic University on April 10 in Boca Raton, Florida.
2012 Audience members take pictures of President Barack Obama at Florida Atlantic University on April 10 in Boca Raton, Florida. Marc Serota—Getty Images
A teenager takes a selfie in front of Queen Elizabeth II during a walk around St. Georges Market in Belfast.
2014 A teenager takes a selfie in front of Queen Elizabeth II during a walk around St. Georges Market in Belfast. The Queen has apparently voiced her dismay that when she carries out engagements she is greeted by a sea of mobile phones.Peter Macdiarmid—PA Wire/Press Association Images/AP

More Must-Reads from TIME

Contact us at letters@time.com