Smart­phone drive de­mand for ef­fi­cient sup­ply chain man­age­ment

Ac­cord­ing to a CMR In­dia re­search, more than 247 mil­lion mo­bile hand­sets were shipped in In­dia dur­ing the year 2013, with a Y-o-Y growth of 11.6 per cent. Over 70 mil­lion mo­bile hand­sets were shipped in the fourth quar­ter of 2013 alone. Smart­phone ship­men

Cargo Talk - - Contents - RATAN KR PAUL

We ex­pect the share of fea­ture phones to slump fur­ther, with in­ter­na­tional and lo­cal ven­dors launch­ing smart­phones at rel­a­tively lower price points.” Ji­ten­der Pan­jwani Head Sup­ply Chain for In­dia Op­er­a­tions, Mi­cro­max

Ac­cord­ing to CMR’s In­dia Monthly Mo­bile Hand­sets Mar­ket Re­view, CY 2013, Fe­bru­ary 2014 re­lease, In­dia recorded 247.2 mil­lion mo­bile hand­set ship­ments for CY (Jan­uary-De­cem­ber) 2013. Dur­ing the same pe­riod, 41.1 mil­lion smart­phones were shipped in the coun­try.

com­par­i­son of over­all mo­bile hand­set ship­ments for CY 2013 and Q4 2013 showed sim­i­lar rank­ing for the top three play­ers.

Ac­cord­ing to Pan­jwani, mo­bile phone ship­ments in Q4 2013, wit­nessed a two per cent Q-o-Q and 16 per cent Y-o-Y growth. The fea­ture phone mar­ket saw a two per cent de­crease in ship­ments over Q3 2013, while the smart­phone mar­ket in In­dia grew by close to 18 per cent Q-o-Q.

Ac­cord­ing to IDC World­wide Quar­terly Mo­bile Phone Tracker re­port, smart­phone ship­ments to In­dia are fore­cast to rise to 155.6 mil­lion units in 2017 from 27.8 mil­lion now, ac­count­ing for a 10.3 per cent share of the global mar­ket, just be­hind China’s pro­jected 30.2 per cent share and the US’s 12.1 per cent.

The re­port also pointed out that In­dia cur­rently ranks sixth in the mo­bile smart­phone mar­ket, with a global mar­ket share of 3 per cent; China has a 32.8 per cent share and the US 15 per cent. In­dia’s smart­phone mar­ket is ex­pected to grow sharply be­cause of a va­ri­ety of fac­tors, in­clud­ing greater avail­abil­ity of low-cost de­vices and em­pha­sis on less pop­u­lous re­gions. In ad­di­tion, ex­pan­sion of 3G net­work cov­er­age and the roll­out of 4G net­works are ex­pected to boost smart­phone sales in the coun­try.

The re­port un­veiled that In­dia’s Year-on-Year smart­phone ship­ment growth is ex­pected to be the high­est among the top coun­tries— China, US, UK, Ja­pan and Brazil—in the list as a ma­jor­ity of the coun­try’s mo­bile phone users cur­rently use reg­u­lar fea­ture phones.

Glob­ally, smart­phone ship­ments are fore­cast to edge out fea­ture phone ship­ments in 2013 for the first time, with ven­dors ex­pected to ship 918.6 mil­lion smart­phones this year, or 50.1 per cent of the to­tal mo­bile phone ship­ments world­wide. Ac­cord­ing to the re­port, top lo­cal ven­dors such as Mi­cro­max and Kar­bonn have been try­ing to make a con­scious shift to smart­phones over the past few quar­ters; how­ever, the share of fea­ture phones still re­mains dom­i­nant in terms of ship­ment vol­ume.

“2013 was pri­mar­ily the year of smart­phones for the In­dia mar­ket, par­tic­u­larly for lo­cal hand­set ven­dors. A first for the In­dia mar­ket was a mar­ginal de­cline in fea­ture­phone ship­ments on a year-onyear ba­sis. This trend is likely to con­tinue with more ven­dors fo­cussing on en­try-level smart­phone of­fer­ings aimed at the con­sumer seg­ment,” said Tarun Pathak, Lead An­a­lyst, De­vices, CMR Tele­coms Prac­tice.

He also un­der­lined that nearly 70 ven­dors op­er­ated in the highly com­pet­i­tive In­dia smart­phones mar­ket in the year 2013, with ‘Tier One’ brands like Ap­ple, Sam­sung, Nokia, Sony, HTC, LG and Black­berry cap­tur­ing close to 53 per cent of the to­tal smart­phones mar­ket, fol­lowed by In­dian brands cap­tur­ing close to 43 per cent of to­tal smart­phone ship­ments. The re­main­ing mar­ket of roughly four per cent smart­phone ship­ments was cap­tured by China OEM brands, where a few more play­ers are ex­pected to en­ter the In­dia mar­ket di­rectly, in­stead of con­tin­u­ing as ODM part­ners to In­dian brands.

“We ex­pect the share of fea­ture phones in the over­all phone mar­ket to slump fur­ther, with in­ter­na­tional and lo­cal ven­dors launch­ing smart­phones at rel­a­tively lower price points. The nar­row­ing price gap be­tween fea­ture phones and smart­phones is one of the big­gest driv­ers of smart­phone adop­tion in a price-sen­si­tive mar­ket like In­dia,” said Pan­jwani.

He high­lighted that in In­dia the smart­phone mar­ket al­most tripled Y-o-Y in Q4 2013 with ship­ment vol­umes reach­ing 15.05 mil­lion units. “The aver­age sell­ing price (ASP) of a smart­phone has come down from US$215 in Q4 2012 to US$163 in Q4 2013. This low­er­ing of ASP is one of the big­gest driv­ers of smart­phone adop­tion in In­dia,” he pointed out.

Mar­ket sur­vey re­veals that Mi­cro­max holds on to its sec­ond spot with about 16 per cent in terms of mar­ket share. The top sell­ing mod­els were the Bolt se­ries and Mi­cro­max Bolt A67. On the other hand, An­droid will con­tinue to re­main the dom­i­nant OS in the mar­ket, ow­ing to the grow­ing low cost smart­phones seg­ment. Win­dows Phone 8 OS has seen an icrease in Q-o-Q and the trend is ex­pected to con­tinue in the com­ing quar­ters - with Nokia plan­ning to launch Lu­mia de­vices

and cov­er­ing the en­tire price spec­trum.

SCM Chal­lenges

Ac­cord­ing to Pan­jwani, sup­ply chain man­age­ment (SCM) is al­ways a chal­leng­ing area to work and do some­thing in­no­va­tive. Since, the mar­ket is chang­ing their ex­pec­ta­tions from quan­tity to qual­ity (from fea­ture phones to smart­phones), the dy­nam­ics have changed for ma­te­rial sup­ply.

“To­day, the cus­tomers are all over, we can’t say that mo­biles will be used only by

‘A’ towns. Con­sid­er­ing, the af­ford­abil­ity of Mi­cro­max phones, the phones reach to all parts of the coun­try. How­ever, the chal­leng­ing part in sup­ply chain is the limited in­fra­struc­ture in cities other than ‘A’ class cities,” he said.

In his opin­ion, search for ap­pro­pri­ate part­ner of lo­gis­tics is al­ways in de­mand, ir­re­spec­tive of do­mes­tic or in­ter­na­tional lo­gis­tics. “Since the ver­ti­cal of tele­com is grow­ing fast, we can ex­pect changes in ar­eas. It’s ‘about tak­ing chances’. The do­mes­tic mar­ket lo­gis­tics com­pa­nies must fo­cus more on the re­gional level set-ups. “To­day, in lo­gis­tics field, we have more or­gan­i­sa­tions fo­cussing on na­tional level and there are limited com­pa­nies fo­cussing on re­gional, district and vil­lage-level sup­ply chain. The new growth / de­mand for busi­ness would come from B& C towns fol­lowed by lo­cal con­nec­tions. Ap­par­ently, this is a niche mar­ket or in other words a tar­get mar­ket for the com­ing years,” he ob­served.

Pan­jwani main­tained that since the mar­ket have grown in B& C towns and con­sumers can buy the phones at af­ford­able prices, the ex­pec­ta­tions from sup­ply chain have evolved from min­i­mum to max­i­mum, near to far off places.

Ap­par­ently, the con­nec­tiv­ity is limited. How­ever, to make ma­te­rial reach in shorten lead time, it is re­ally es­sen­tial to have fo­cused ser­vice providers to in­vest in these towns for bet­ter trans­porta­tion. To­day, the fo­cus is only on con­nec­tiv­ity and not on the ma­te­rial han­dling con­di­tions, cus­tomer cen­tric ap­proach, cus­tomised ve­hi­cles at lower cost and prod­uct- cen­tric ap­proach. “These changes in view would cer­tainly change the hand­set- sell­ing com­pany’s mar­ket share and also would open a new ver­ti­cal of growth to ser­vice providers & trans­porters for a decade to come,” he pointed out. He also feels that in the do­main of sup­ply chain, there are a lot of tan­gi­ble / in­tan­gi­ble fac­tors in­volved to meet ex­pec­ta­tions of the in­dus­try. “Shar­ing in­for­ma­tion on time en­ables your cus­tomers to plan their work area. But, these days, right com­mu­ni­ca­tion and in­for­ma­tion at the right time, to plan your space in mar­ket is es­sen­tial,” he stressed.

“It is re­ally good to work with pro­fes­sional com­pa­nies and let them man­age your pain ar­eas well. Any or­gan­i­sa­tion can be pro­fes­sional pro­vided they pay at­ten­tion to the cus­tomer needs and work to­wards cus­tomer sat­is­fac­tion. Then the size of or­gan­i­sa­tion re­ally doesn’t mat­ter,” Pan­jwani con­cluded.

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