Mobile Phones: India Inc. Gets Smarter


page19-sep-oct-img Consumers are lapping up feature-laden phones from Indian manufacturers which come at a fraction of the price of an Apple or a Samsung product By Srishti Taneja

They say that you ultimately get back to where it all began. When mobile phones were first invented, they were really big in size. Then companies devoted the best of research and technology to miniaturising them. But with the advent of the smartphone, one sees chunkier phablets with big screens trending once again.

India’s mobile telephone users are switching over to smarter phones, leading to a 186 per cent growth in the smartphone market in just the first quarter of 2014. Tonnes of phones are being sold in a really short time span, thanks to the mushrooming Indian brands and the numerous online selling platforms.Phones Story.indd

Smartphones in India have become a game changing consumer product not only for the user but also for the indigenous phone manufacturers. Offering a smartphone experience at a fraction of the price of an Apple, Samsung or Nokia product has worked out for Indian manufacturers.

LAVA mobiles marketing head Tarun Verma says, “This product category has grown and widened over the past decade than any other product category. A smartphone is soon becoming a ubiquitous accessory. So much so that one may think that smartphones had been here from time immemorial.” According to a research report, local brands have also raised their share in the smartphone market in urban India, from 4.2 per cent in July 2012 to 14.1 per cent in October 2013.

 IndiPhones Story.inddan markets are filled with a variety of phones and enough number of buyers from various classes and segments. But still, nearly half of the entire smartphone and tablet market is in the country’s Tier 1 cities. And there is an intense battle for the control of the market between the international biggies and the smaller Indian counterparts. As soon as players like Samsung or Apple come up with a new product, domestic Indian manufacturers come out with phones with similar features at a third of the former’s price. Owing to their price advantage, these phones fly off the shelf as soon as they land.

Mozilla has been successful in breaching even the $40 barrier in India, launching a smartphone jointly with Indian manufacturer Intex. The newly launched handset will be a really handy option for a lot of people, especially in Tier 2 and Tier 3 cities. And the price tag is absolutely enviable at just 1999 Indian Rupees or $33. Companies like Micromax, LAVA, Karbonn, Oplus, XOLO, Spice, etc. are also not lagging ar behind. Together, these brands are redefining buyer’s preferences in a competitive market.

According to independent market research and consulting firm, Counterpoint Research, Micromax overtook Samsung to become the largest mobile handset supplier in India in the second quarter of 2014. Other Indian brands like Karbonn and LAVA have also shown appreciable increase.page20-sep-oct-img

Smartphones are in such scorching demand that buyer’s preferences are changing too. Sumit Taneja, store owner of KONNECT stores in Gurgaon, says, “Two years back, people were not really confident about small label phones. In most cases, they would prefer Samsung over Micromax or be it any other Indian brand. A few brave ones tried out the Q55 Bling by Micromax but were not satisfied with it. But the situation has totally changed now. Customers come to the store with their own preferred models of various upcoming brands.”

The Indian smartphone brands seem to have invested really high amounts in Research and Development. This not just ensures superior features but also guarantees lower prices. Although one sees new expensive smartphones being launched with alarming frequency, less than five per cent of Indians indulge in buying them. A recent online selling pattern survey has shown that eight out of 10 phones sold in India are priced at less than 5000 Indian Rupees. And this is where the new Indian mobile brands are gaining the advantage as Soumitra Gupta, managing director and CEO of Oplus India, says that “drop in prices opens up the market for lower income groups, making it easier for them to procure a smartphone with good specifications.” He adds, “the geography of the market itself increases as products become more economical and therefore demand also increases.”

This increaseSONY DSC in demand for these small brands has had a cascading effect on the shipment of phones from China. China’s smartphone manufacturing has slowed for the first time in more than two years. Smartphone shipments from China fell 4.3 per cent quarteron- quarter to 90.8 million from 94.8 million in the last quarter of 2013, according to IDC’s Asia/Pacific Quarterly MobilePhones Story.indd
Phone Tracker.

A big factor behind the jump in the sale of these indigenous phones has been youngsters and teenagers. According to a new study, there are 51 million smartphone users in urban India today, an 89 per cent increase
from 2012 when there were just 27 million users. The study also reveals that the biggest spike is in the youngest age group of between 16 and 18 years. Only five per cent of them used a smartphone in 2012. In 2014, 22
per cent of them do. Also, mobile phones have emerged as a strong alternative to traditional entertainment media like television. In metro areas, youngsters used smartphones mostly to watch movies and listen to music, though in non-metro areas, TV shows and lifestyle entertainment videos rule the roost. It’s noticable that there is a growing appetite for longer videos on mobile, with most metro users (59 per cent) opting for videos over five minutes in length. Customers now see camera as an integral part of mobile phones. Camera phone sales grew by over 100 per cent, while sales in mobile phones without camera dropped by 32 per cent. Features like touchscreen functionality,Wi-Fi, dual SIM card and location-based services also remain in constant demand.

While the smartphone market suffers from saturation in western countries, the growing economies seem to have a different tale to offer.

Whether Indian brands will dare to break through into other markets is something only a soothsayer can spell. But given its low price advantage, it should not be an easy pushover, once the quality control mechanism gets firmly in place. If the LG-Google tie-up on the Nexus series is any pointer, there is no reason why a Mozilla-Intex joint operation should not give it a good shot.

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