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New Delhi:
Once dominated by global brands like Nokia, Samsung and LG, the
Indian mobile handset market has seen a revolution in the past few
years with home grown companies giving the overseas giants a run
for their money.
Mobile phone users in the country -- which sees some 20 million
new connections joining the network every month -- also have an
unprecedented choice of picking their handsets from as many as 72
global and domestic players. And the price range is also wide -- a
plain-vanilla handset aimed at the rural market can cost as low as
Rs.700, while those from Vertu Ferrari Ascent Ti targeted at the
upwardly mobile can set you back by a whopping Rs.3,56,915.
So, which are these Indian firms that have mushroomed over the
past few years? Among the most visible are Spice Mobile, Micromax,
Karbonn, Olive, Maxx, Lava, Videocon, Lemon, Zen, Wynncom, Techcom
and T-Series.
According to CyberMedia Research (CMR), the total number of
emerging handset brands in India in October-December 2010 touched
72 and had a share of approximately 45 percent in terms of sales.
"This was up from five vendors with less than one percent share of
unit shipments in the January-March 2008 quarter," Siddharth Neri,
analyst, India Mobile Device Markets, CMR, told IANS.
"Leading global MNC handset brands such as Nokia, Samsung, LG,
Sony-Ericsson and Motorola together accounted for approximately 50
percent of total shipments in the October-December 2010 quarter,"
he added.
Frost and Sullivan, a corporate research and consulting firm, says
domestic brands are eating into the market share of global handset
manufacturing firms by offering devices with attractive features
and aping the design of best-sellers at dirt cheap prices.
"Home grown players have definitely become a threat to
international players. A majority of the population, including the
rural crowd, still uses low and mid-tier phones. Their marketing
and distribution strategy is phenomenal," said Abhishek Chauhan,
senior consultant for ICT practice.
"Initially there used to be 3-5 brands but now there are scores of
them which has led to a massive competition and a sharp decline in
prices," he added.
However, a senior executive from a leading international mobile
handset brand denied that local firms were as big a threat as they
were made out to be.
"The fact is that many players in the market are operating at
different price points. However, we look at the overall value
proposition of the brand; it's not just about pricing but also
about overall customer experience," said the executive.
International players have also maintained that the growth for the
industry, in terms of technology and margins, lie in the smart
phone category and this is where they would concentrate rather
than get into a price war over lower valued products.
But domestic manufacturers contend that once they are able to
upgrade their technology, it will lead to a massive increase in
the market share of smartphones manufactured by home grown
companies.
"Two technology trends, 3G and Android, have taken the Indian
telecom sector by storm and the share of smartphones in the
overall handset market is going to increase in a big way. But this
would be more skewed towards the metros and tier-1 cities," said
Ajjay Agarwal, chairman and managing director of Maxx mobile.
Foreseeing this trend, Maxx has already launched an Android from
the smartphone kitty and has plans of launching 3G-enabled phones
soon.
"Mobile handset players can contribute to the growth in a
significant way by making the latest technologies and value-added
service (VAS) available to users at cost-effective prices,"
Agarwal told IANS.
Another domestic mobile manufacturer, Karbonn Mobiles, said that
in order to cater to the growing needs of the mobile phones, the
Indian companies will have to concentrate more on research and
development.
"To sustain this wave of mobile revolution it is very important
for handset providers to focus on research and development by
strengthening the technology prowess, utility and service
aspects," said Shashin Devsare, executive director, Karbonn
Mobiles.
According to the Frost and Sullivan report, the mobile handset
market had unit shipments of 104.9 million in 2010 and expects
this to touch 208.4 million in 2016.
This included 2.9 million units of smartphone shipment in 2010,
which is expected to grow to 29.4 million by 2016.
"In 2011, the mobile market is likely to witness almost a
three-fold increase in the number of participants. This is
expected to result in a price war and a consequent squeezing of
profit margins," said the report.
(Cindrella Thawani and
Priyanka Sahay can be contacted at biz@ians.in)
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