Amid the government'€™s plan to impose a mandatory local content requirement for 4G handsets, rising smartphone star Xiaomi is still in wait-and-see mode on whether to partner with a local phone assembler in the country.

Xiaomi'€™s international vice president, Hugo Barra, said on Tuesday that his firm remained open to the best possible ways to access the Indonesian market, but revealed that it was still waiting for clarity on the so-called '€œmade in Indonesia'€ regulation for 4G smartphones.

'€œThere are a number of proposals, but [they] haven'€™t been made into a regulation,'€ he said.

Barra went on to say that situations were quite different in India and its soon-to-be new market '€”Brazil, where Xiaomi was closely looking to partner with local assemblers to avoid high import taxes in both countries.

In Indonesia, importing smartphones is much cheaper than manufacturing locally as the government currently imposes between a 5 percent and 15 percent import tax on imported phone components compared to close to zero percent for imported smartphones, the Indonesia Cell Phone Association (APSI) has previously stated.

In a move to benefit the local phone industry, the government has stated that it will issue a regulation requiring a minimum of 40 percent local content for all 4G handsets on sale in the country by 2017.

'€œPublic consultancy about the planned regulation is ongoing and I will discuss it with the trade and industry ministers in the next two weeks. I hope the regulation can be issued in June,'€ Communications and Information Minister Rudiantara informed reporters on Tuesday.

Xiaomi general manager for Southeast Asia Steve Vickers said that the potential requirement for local assembly of 4G devices would be a challenging issue for his firm.

He said, however, that Xiaomi would wait for the regulation to be issued so that it could assess what it needed to do to comply with the regulation to enable the firm to continue growing in the world'€™s fourth most populous nation, where smartphone penetration still hits low at 23 percent.

Barra said that Xiaomi would maintain its presence in Indonesia as the country remained pivotal market for the company.

'€œI think Indonesia certainly has potential to become the third-largest market in the world after China and India ['€¦]. I think that could happen this year,'€ he said.

While refusing to reveal its specific sales target in the country, Xiaomi disclosed that it had sold no fewer than 290,000 units since creating a presence in the country in September last year.

'€œLast year we sold just over a quarter million units ['€¦]. Subsequent to that we launched Redmi2 about a month ago. We sold 40,000 units of Redmi2 on the first day of sales. We'€™ve been doing weekly flash sales and have sold over a hundred thousand units already,'€ Vickers said.

He went on to say that the current economic slowdown would benefit Xiaomi given its value proposition of excellent quality products at more affordable price points.

On Tuesday, Xiaomi launched its latest smartphone, the Mi 4i, in the country, targeting middle-income consumers.

The new handset, which is priced at Rp 2.79 million (US$212.3), is claimed to have better battery life than that of the iPhone 6 and same quality camera as those of Sony and Samsung.

The 4G-ready device is scheduled to hit shelves on May 26, with buyers being required to place pre-order on Xiaomi'€™s e-commerce platform. (ind)

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