Finnish Phone Maker HMD Bets on Indian AI Chatbot to Crack Local Market

Finnish phone maker HMD has launched its first smartphone, the Vibe 2 5G, which comes bundled with Indian AI company Sarvam's chatbot Indus. The partnership, announced during the India AI summit in New Delhi in February, marks a strategic move by HMD to gain traction in the local market. The Indus app, powered by Sarvam's 105-billion-parameter model, supports 22 Indic languages and features mid-sentence code-switching, allowing for fluid language mixing.

This capability enables the assistant to better understand the context of a query. However, the app currently requires an internet connection and doesn't have a shortcut to invoke the AI assistant. For HMD, the partnership is an opportunity to gauge the appetite for an India-focused chatbot.

"With this partnership, the first thing we want to do is get the Indus app to consumers," said Ravi Kunwar, HMD's CEO and Vice President for India and APAC. "Once they start using it, we will move to phase two to focus on driving more traction and stickiness. Right now, by pre-loading the app, we want to be more accessible to users," he added.

The Vibe 2 5G is a mid-range Android phone with a 6,000mAh battery, priced at ₹10,999 ($114). According to Kunwar, other devices in the Vibe series will also feature the chatbot, and a feature phone with Sarvam AI integration is expected to launch in the coming months. This could prove significant for both companies, given HMD's 4% share of India's feature phone market in 2025.

While the Indus app has been downloaded over 293,000 times in India since its launch, this pales in comparison to ChatGPT's 43.9 million downloads. Nevertheless, the strategy behind the HMD deal may hold more promise, particularly in a market as large and linguistically diverse as India. Sarvam, one of India's prominent AI startups, is reportedly on track to become one of the most funded AI startups in the country, with a potential funding round of $300 million at a $1.5 billion valuation.