Lo­cal Hand­set Cos Fight for Survival amid Chi­nese Blitz

The Economic Times - - Brands: Creating Desire - Our Bureau

New Delhi: In­dian hand­set ven­dors are star­ing at a bat­tle for survival in the face of a Chi­nese on­slaught, hav­ing been pushed out of the top five in smart­phones even as mi­gra­tion to this cat­e­gory slows down, tech­nol­ogy re­search firm IDC said. Home­bred play­ers such as Lava, Kar­bonn, In­tex and Mi­cro­max, which have been dom­i­nat­ing the fea­ture phone seg­ment, now face chal­lenges in that seg­ment too from Chi­nese play­ers.

In the smart­phone mar­ket, the share of China-based ven­dors touched a whop­ping 46% in the past quar­ter, with their ship­ments dou­bling from the same pe­riod last year. The share of home­grown ven­dors, mean­while, slipped to 19%.

“This is the first time when none of the home­grown ven­dors were able to make their po­si­tion in the top five,” said Jaipal Singh, mar­ket an­a­lyst for client de­vices at IDC In­dia, at­tribut­ing the loss to ven­dors’ de­ci­sion of stick­ing with a 3Gheavy port­fo­lio and pri­ori­tis­ing the price game over prod­uct ex­pe­ri­ence.

In the quar­ter ended De­cem­ber 2016, Sam­sung’s mar­ket share fell by 13.1%, but the Korean giant con­tin­ued to lead the smart­phone mar­ket at 25.1%. Xiaomi ended the quar­ter with a 10.7% share, fol­lowed by Len­ovo-Mo­torola at 9.9%, Oppo at 8.6% and Vivo at 7.6%.

Trou­ble for lo­cal play­ers is go­ing to ag­gra­vate fur­ther as China-based ven­dors have now en­tered the high vol­ume fea­ture phone mar­ket. China's Trans­sion Group, which en­tered the In­dian mar­ket in the April-June quar­ter last year with Itel brand, be­came the No 2 player be­hind Sam­sung with a 7.5% share in the over­all mo­bile phone mar­ket, with ag­gres­sive ship­ments of fea­ture phones in the fourth quar­ter. In­tex, Lava and Mi­cro­max took the No 3, 4 and 5 po­si­tions for over­all hand­sets in the quar­ter ended De­cem­ber 2016, with 7.1%, 7% and 5.8% shares, re­spec­tively, but each lost more than 40% their share on quar­ter. “The fea­ture phone seg­ment is likely to con­trib­ute the ma­jor­ity of mo­bile phone ship­ments in 2017; the mi­gra­tion to smart­phones is ex­pected to fur­ther slow down due to the in­tro­duc­tion of low-cost 4G fea­ture phones and its con­tin­ued rel­e­vance to its size­able tar­get con­sumer,” said Navk­endar Singh, se­nior re­search man­ager for client de­vices at IDC In­dia. Smart­phone ship­ments in the quar­ter ended De­cem­ber 2016 were flat on year at 25.8 mil­lion units, but de­clined 20.3% the pre­vi­ous quar­ter. The firm at­trib­uted this mainly to a sea­sonal de­cline af­ter an all-time high fes­ti­val quar­ter and the im­pact of de­mon­eti­sa­tion in Novem­ber.

In 2017, re­place­ment de­mand would drive most of the smart­phone ship­ments, IDC said. The tough-year pre­dic­tions fol­low a mar­ginal 5.2% ex­pan­sion in 2016, dur­ing which109.1mil­lion smart­phones were shipped.

Fea­ture phones re­main the dom­i­nant cat­e­gory in the to­tal mo­bile phone mar­ket, with annual ship­ments of 136.1 mil­lion units. The cat­e­gory de­clined by 9.4% in 2016, slower than the pre­vi­ous year’s 16.2% fall.

“Fea­ture phone to smart­phone mi­gra­tion has slowed down as prices of smart­phones are still quite high for a fea­ture phone user. Also, ease of use, long bat­tery life and dura­bil­ity of fea­ture phones con­tinue to be rel­e­vant for a large num­bers of users of this cat­e­gory,” said Karthik J, se­nior mar­ket an­a­lyst of client de­vices.

Home­bred play­ers like Lava, Kar­bonn, In­tex and Mi­cro­max now face chal­lenges in the fea­ture phones seg­ment, too

FILE PHOTO Chi­nese cos have snatched a huge mar­ket share from In­dian ri­vals

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