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
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.
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.