FEA­TURE PHONE USERS TURN ‘SMART’ER

Sales of smart­phones is ex­pected to over­take fea­ture phone in 2016

DQ Channels - - Channel Pulse - ANKIT PARASHAR (ankitp@cy­berme­dia.co.in) More on the web: Read more de­tails atwww.dqchan­nels.com

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

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