Indian handset makers script a comeback
When Nilesh Yadav damaged his mobile phone last December, his friends insisted that he buy a Redmi phone with 4GB RAM. Or at least a cheaper version of it, priced at ~6,999. But Yadav (26), a Delhi-based media professional, bought ELYT Dual from Intex. Apart from the dual front camera feature at the same price, his familiarity with the brand influenced the purchase, he says. He is not alone. There are other patrons of the Indian brand who continue to stick to it.
Intex, like Micromax, Lava and Karbonn — once the big four of the Indian smartphone handset industry — has lost considerable market share in recent quarters. But its influence over the market has not disappeared. Despite a free fall in shipment shares, these four Indian brands continue to hold well over a fifth of the 360 million local smartphone market by the install base.
According to CyberMedia Research, Samsung held 32 per cent share of the market till September by install base, followed by Micro max at 11 percent. The Guru gram headquartered firm has 40 million active devices in the country. To put this in perspective, this goes way beyond the presence Xiaomi has among consumers at present. While the current market leader is selling well over 8 million devices a quarter, its share among active smartphones remains at 5 per cent. Intex, the second largest Indian vendor, has close to 18 million active devices and is on a par with Xiaomi.
Despite being decimated by the Chinese storm that continues to intensify with Xiaomi’s increasing market share, analysts say there is hope for Indian handset makers. According to Faisal Kawoosa, lead, telecoms and semitronics, CyberMedia, retaining their existing customers will be an important factor
for the local vendors if they wish to make a comeback in the market. “They have a sizeable base. Thus, instead of giving up, they need to focus on repeat buyers. Targeting the affordable segment will be wise,” he said.
Also, while the top five players in the market — Samsung, Micromax, Lenovo, Intex and Xiaomi — hold some 59 per cent of the market, the rest is fragmented among some 1,175 brands. This offers an opportunity for the big four Indian brands to increase their sales slowly but steadily, he says.
After being routed in the retail market by early 2016, the local firms are now taking measures to control the damage. Micromax and Intex are working with Google to come up with cheaper smartphones
that will offer an experience similar to a device costing over ~5,000. It is a bet that Google also needs to make and sits well with the US technology giant’s India strategy.
Android Oreo (Go), the mobile operating system that has been designed for low capacity smartphones, is the new bet for both. Micromax has set an ambitious target of a ~2,000 smartphone on Android Oreo (Go) and Intex is targeting the ~3,000 price range.
According to Nidhi Markanday, director, Intex Technologies, while the firm rationalised its portfolio and updated all devices — from 3G to 4G — last year. This year, the focus has shifted to screen sizes larger than 4.5 inches. “According to Gfk, we continue to be among the top three brands under ~5,000. Offering value for money products at the lower end of the market, which is still quite large, has been our aim and it continues to be so,” she said. Like its Indian peers, Intex has a strong offline sales presence; it reaches 75,000 outlets and by the end of 2018 the number may go up by a fourth. Apart from focusing on key retail outlets that have been captured by Chinese rivals like Xiaomi, Oppo and Vivo, Intex plans to expand its online reach. The firm derives 10 per cent of its sales from e-commerce — much lower than the industry average of 35 per cent. “A couple of online-only devices are in the pipeline,” Markanday said.
Lava is among the first few handset manufacturers to start a design centre in India. It announced an investment of ~2.5 billion by 2021 to open the design centre in Noida. According to Hari Om Rai, chairman and managing director, Lava International, the company will invest ~26.1 billion in setting up manufacturing units. And by 2023, Lava will have an annual production capacity of 216 million mobile phones a year.