The supply chain for Google’s smartphone partnership with Reliance has encountered a roadblock, according to a report.


The co-branded phone will be unveiled during the Indian conglomerate’s shareholder meeting on June 24.

Sales of the low-cost device were expected to be in the hundreds of millions in the first few years, according to Reliance.

According to those familiar with the situation, billionaire Mukesh Ambani’s attempt to capture the Indian market with a domestically made Google-powered smartphone is hitting headwinds, with supply-chain delays and rising component prices limiting production levels.

According to the sources, Ambani’s Reliance Industries Ltd. had hoped for sales in the hundreds of millions in the initial years for the low-cost device, but now expects only a fraction of that at launch. The co-branded phone will be unveiled at the conglomerate’s shareholder meeting on June 24, followed by an official debut in August or September, according to the people, who asked not to be identified.

The mogul aims to use aggressive pricing to reshape the world’s fastest-growing smartphone sector, much like he did with telecom services. Any delay in the project, though, would be a major setback for Reliance and its Indian manufacturing partners. As they follow the same audie, Chinese rivals Xiaomi Corp., Oppo, and OnePlus have built their brands and set up local manufacturing facilities.

Engineers from Reliance Industries and Alphabet Inc.’s Google have collaborated to create a device for the technology-hungry yet price-conscious country, which is predicted to have 900 million internet users by 2025. According to the individuals, they’ve developed a hardware design and a version of the Android operating system that can give a high-end experience without the need of expensive materials. However, obtaining the components has proven difficult since the coronavirus pandemic boosted global demand for electronics, causing shortages.

During the process, cultural contrasts between Reliance and Google emerged, with the Indian corporation depending on a top-down operating approach while the American engineers are more self-directed, according to the sources. In contrast to Google’s customary tendency for planning things months in advance, this has resulted in last-minute decisions and calls in the middle of the night.

Representatives from Google and Reliance did not reply to requests for comment.

According to the persons, a meeting between the Reliance and Google teams last week, just a fortnight before Ambani’s planned reveal, failed to provide any finality on the hardware specifications. Displays and chipsets, for example, are in low supply and taking longer than normal to buy, causing uncertainty.

Due to shortages in China, which manufactures and supplies components for practically every smartphone on the planet, the period to obtain such materials has increased to 60 to 75 days from 30 to 45 days previously, the people added.

According to a person working for an Indian contract manufacturer in talks to assemble the Reliance-Google product, the price of a microprocessor used in a smartphone battery charger has virtually doubled in a couple of months, from 5 cents to 9 cents. According to the source, display prices have risen by 40%, and securing a chipset bulk allotment has become incredibly tough.

The issues have been exacerbated by rising freight prices. According to a worker at another Indian contract factory, a 20-foot container from China to India that cost $800 pre-pandemic has risen to $5,000 and now costs $3,600.