FEATURE PHONE USERS TURN ‘SMART’ER
Sales of smartphones is expected to overtake feature phone in 2016
Smartphone and feature phones are two categories of cellphones that are available in the market. Since the launch of smartphones, it has been on a constant rise, with many people opting to update and change their phones constantly to include new technologies. However, for many people smartphones are quite a waste of money as they do not tend to use many of the features that are provided with the smartphones.
Recently as per the Cyber Media Research study viewpoint for 2016 for the India Mobile Handsets industry, Smartphone market will overtake the feature phone which pegs the total units expected to be shipped in India at 250 million units. This would be a 4% growth vis-à-vis calendar year 2015. Smartphones will continue to be the growth engine for the market, expected to grow at 37% compared to 32% average growth for the previous three years.
Also 4G and expansion of reach to Tier II and Tier III markets, besides the rural hinterland are expected to be the main reasons behind this growth.
Expressing his thoughts on the same, Faisal Kawoosa, lead telecoms analyst, CMR, said “We are witnessing a transition period for the industry from mass to niche, feature phones to smartphones, 2G and 3G to 4G, ‘offline only’ to hybrid, and ‘imports only’ to domestic manufacturing with imports. The change leads to contraction of the market by volume which was seen towards end of calendar year 2015”.
“Once this transition is over and vendors adopt the right mix of sourcing and marketing, and develop competencies to address the emerging or niche segments rather than the mass market, we should see the market rebound,” Kawoosa added.
Mobile Vendors are also keeping their eye on both the platforms and focusing the markets as per the users of Smartphone and Featurephone.
Sharing his views on the same Pankaj Rana, Business Head – Mobility Division, Panasonic India, said “Despite having outpaced the US as the world’s second-largest smartphone market, and being the fastest-growing globally, India still remains low on smartphone penetration, offering unprecedented growth opportunities for industry players. It is clear that conversion from feature phones to smartphones is gaining traction as feature phones are registering a decline in annual shipments, signalling a grad- ual end to the era of feature phones”.
“Currently the smartphones holds 40% of the overall market share which will grow further to 50% by this year end. Year-on-year innovation is raising the bar in the industry, encouraging a 100% conversion from feature to smartphones, as the rapid advances of smartphone technology and competitiveness in the industry are lowering the costs of adoption. This surge is largely the result of the rollout of 4G/LTE services in India, the growth of the used smartphones market, and the boom in mobile applications such as e-commerce, e-tailing, mobile banking, social media, digital advertising and marketing. As Indian become more digitally empowered and aware, with its huge demographic dividend, there is a trend of first-time users opting for a smartphone. As a result, mobile-internet connections are grow- ing and phasing out the utility of feature phones” he added.
Govind Bansal, Co-Founder, Aqua Mobiles shared his views and says, “This development is in the line of our expectations. We have developed our products keeping in mind about the market disruption and expectations of the Indian consumers, which are getting higher with the popularity of smart technology and easy accessibility to the internet. However, tier 2 & 3 and smaller towns still have a majority of feature phone users. I think there are lots of first time users, and India is a big market where feature phone segment is still very strong. Although, our niche revolves around feature phones at the moment, but we are also focusing on smartphones, and in this segment too Aqua is doing equally well.
Talking about the revenue distribution of Panasonic feature phones only contribute of just about 3 per cent of the total revenue for Panasonic Mobility Division comparatively to the 97 per cent which is majorly come from Smartphones segment.
70% revenue from features phones and 30% from smartphones comes for Aqua Mobiles. Though feature phones used to be their bread & butter in the past, when almost 90% of revenue was solely from feature phones. Now, there has been an increase in the smartphone sales for Aqua Mobile. Almost 30% of revenue currently is from smartphones. Aqua Mobile expects the same trend continue for a few months, but by the end of 2016, company has almost 60% of revenue would come from smartphones.
However, Mobile companies are focusing on smartphones market in India and making future plans as per the market after going through with these studies, but vendors cannot neglect the featurephone market as well in India where approx 70% of people lives in villages and most of them are feature phone users. So this is very difficult for vendors to manage the both segment of market for different variety of users.
“We have developed our products keeping in mind about the market disruption and expectations of the Indian consumers, which are getting higher with the popularity of smart technology and easy accessibility to the internet. However, tier 2 & 3 and smaller towns still have a majority of feature phone users” GOVIND BANSAL, Co-Founder, Aqua Mobiles
“Currently the smartphones holds 40% of the overall market share which will grow further to 50% by this year end. Year-on-year innovation is raising the bar in the industry, encouraging a 100% conversion from feature to smartphones” PANKAJ RANA, Business Head – Mobility Division, Panasonic
“We are witnessing a transition period for the industry from mass to niche, feature phones to smartphones, 2G and 3G to 4G, ‘offline only’ to hybrid, and ‘imports only’ to domestic manufacturing with imports” FAISAL KAWOOSA, Lead telecoms analyst, CMR