Monday, 21 July 2014
A year ago, the marketing departments of nearly all flagship Androidsmartphone brands were busy touting multi-core processors, gigabytes of RAM and constantly rising megapixel counts. In the race to get the best specification-sheet, prices for flagships were easily crossing the Rs. 40,000 - and even Rs. 50,000 - mark as witnessed in full-page newspaper advertisements and hoardings. This year, the game is changing. The battle for the best specifications has turned into an all-out price war while brands try and find the next 'killer' feature, at, relatively speaking, a bargain bottom price. Indian smartphone brands such as Micromaxand Karbonnwere among the first to realise that competing on price is the key to success in the country. Nearly two-thirds of the smartphone market is in the sub-$150 (Rs. 9,000) segment according to IDC. International brands hopped on to this bandwagon, and Nokia's most successful Windows Phonedevice - the Lumia 520- launched at just over Rs. 10,000. In the last 12 months though, Motorolaled the field with its affordable Moto Eand Moto Gsmartphones, followed by Asuswith the ZenFone 4and ZenFone 5- which lowered the price further - and now "China's Apple" Xiaomihas stepped in the fray with the Mi 3 smartphone, which has specs that compare with flagships from Samsung, Sony, and HTC, but it is available at nearly one-third the price. Karan Thakkar, Senior Market Analyst - Tablets, Enterprise Client Devices and PC Monitors at IDC, told NDTV Gadgets over email that Indian smartphone brands have forced global players to reconsider their pricing. "We have already witnessed Indian vendors continuously posting a price challenge in front of the global players," says Thakkar. "Even global vendors are positioning high quality products at competitive price. The Moto series is a perfect example. Within five months shipments of Moto G, E and X put together have crossed 1 million mark." What makes this even more interesting is that Motorola's phones are only available through a single sales channel in India - online retailer Flipkart. (Also see: Why Are Mobile Brands Ditching Retail for Online Sales?) The new phones from Asus have also already sold 40,000 units, four days after the devices went on sale, and interest in the Xiaomi Mi 3 is also sky-high. According to an IDC reportfrom June, the Indian smartphone market grew 186 percent year-on-year in Q1 2014. It states, "The sub-$200 [approximately Rs. 12,000] category in smartphones contributed to about 78 percent [of the total increase], hinting at the fact that the growth in the Indian smartphone market still remains constrained towards the low-end of the spectrum." What's changing though is that the specifications of phones launching at lower prices are at par with, if not ahead of, the flagships that cost thrice as much. Thakkar says high-quality smartphones are now available at competitive prices and that the big brands need to watch out. "It will be interesting to see how the market behaves to the Asus ZenFone series and Xiaomi as both the brands are known for quality products with competitive price," he says. "Big brands still hold the relevance as the image they have built over time is not expected to fade away in weeks or months. But having said that, they definitely need to keep a check on the price for their future line-up of devices." Another change that has come about lately is a growing focus on Google's part to ensure that software updates for phones will continue for longer periods of time. Google has frowned upon manufacturers who pre-load their phones with customised software and demanded that they stick to stock Android as much as possible, if recent reportsare to be believed. One step in this direction is the Android Oneprogramme, where Google provides a hardware reference design to manufacturers so that they make high-quality devices running stock Android in the sub-$100 (Rs. 6,000) price point. Micromax, Karbonn and Spice were the first three partnersin this programme that was unveiled at Google I/Oin June and Intexand Celkonhave signed up since then, according to a report. (Also see: No, Google Will Not Subsidise Android One Handsets in India) With an entry-level ecosystem that promises a minimum level of performance, the 'mid-range' phones under Rs. 20,000 have also had to improve the user experience, which has reduced that gap to brand flagships. This should help India's feature phone-dominated market move to smartphones faster. Anshul Gupta, Principal Research Analyst at Gartner, says, "Currently, the smartphone market share in India is around 25-27 percent, but in four years it is expected to reach 80 percent." MediaTek, a chipset manufacturer whose products power several smartphones made by Indian brands, says India is a cost-conscious market and hence demand for entry-mid level devices here would continue to rise
