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India's mobile phone users spoilt for choice

Sunday June 05, 2011 03:11:53 PM, Cindrella Thawani & Priyanka Sahay, IANS

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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