Apple, Samsung outpaced in India by less costly smartphones

Apple Inc. and Samsung Electronics Co. are being beaten in the fast-growing Indian smartphone market by a couple of aggressive local competitors.

Sales growth at Bangalore-based Karbonn Mobiles India Pvt. and Micromax Informatics Ltd. is being fuelled by Indians buying their first smartphone to surf the Internet, which will be accessed by more than 300 million people by 2017. Their secret: the price.

In a country where about 800 million people live on less than Rs.100 a day, Karbonn handsets start from Rs.3,599 and Micromax’s from Rs.3,999, less than the cheapest Apple and Samsung smartphones. The iPhone 4 is available for Rs.26,500 and Samsung’s Galaxy Y Duos Lite for Rs.6,110.

“India is poised for a smartphone boom; just look at the Internet penetration and potential, “Deepak Mehrotra, chief executive officer of Gurgaon-based Micromax, said in an interview. “But we don’t see any point to offering a Ferrari.”

India will become the third-largest smartphone market by 2017, according to the Framingham, Massachusetts-based researcher IDC, after China and the US Samsung, based in Suwon, South Korea, remained No. 1 by unit shipments in the December quarter and Cupertino, California-based Apple was sixth after shipping 254,000 iPhones, according to IDC.

“Micromax, which ranked second by shipments, and fifth-placed Karbonn are growing faster, according to IDC. Micromax increased shipments to 633,000 smartphones in the last quarter of 2012 from 9,990 a year earlier, while Karbonn grew to 304,000 from zero, according to Gurgaon-based Consumer Media Research. Karbonn introduced smartphones in April 2012”, said Shashin Devsare, executive director at
the handset seller.

Subsidized data

Karbonn subsidizes monthly data packages for some users carrying their phones, contrary to the global model of offering discounted devices to lure subscribers into signing annual service contracts, according to Devsare.

The two Indian mobile-phone sellers are both doing so well that they have considered going public, though they have put off a decision for now.

Mehrotra said he hopes Micromax will topple Samsung as India’s top smartphone vendor by March 2014. Karbonn has set a target of selling 5 million smartphones in the fiscal year that started 1 April. Samsung is on track to sell more than 8 million smartphones in 2013, according to Consumer Media Research.

The scale of the Indian smartphone market is growing by leaps and bounds with increased affordability, said Manasi Yadav, an analyst at IDC in India. Local vendors have remained dominant in the sub-$100 price band while they pose serious competition in the $100 to $200 range.

 

 

AMIT KUMAR SINGH

 PGDM 2ND SEM