Smart­phones Make it Big!

A 172-per­cent leap in ship­ments pushed smart­phones’ share from un­der seven per­cent in 2012 to over 16 per­cent in 2013.

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The year 2013 marked a de­ci­sive ac­cel­er­a­tion to­wards the smart­phone adop­tion in the In­dia mo­bile phones mar­ket. While the fea­ture phones seg­ment saw a mar­ginal de­cline at -0.2 per­cent—from a ship­ment of 206.5 mil­lion in 2012 to 206.1 mil­lion in 2013—the smart­phone mar­ket grew a whop­ping 172.2 per­cent.

Smart­phone ship­ments in 2013 rose to 41.1 mil­lion from 15.1 mil­lion in 2012. This amounted to the share of smart­phone ship­ments ris­ing from 6.8 per­cent in 2012 to 16.6 per­cent in 2013. It was also the first year ever when smart­phones clocked a dou­ble-digit share of the over­all mo­bile phone ship­ments.

Key Play­ers

Sam­sung con­tin­ued to be the mar­ket leader for the smart­phone seg­ment, fol­lowed by Micromax, and Kar­bonn. How­ever, Nokia still man­aged to stay put in the lead­er­ship po­si­tion for the over­all mo­bile phones mar­ket with 18.9 per­cent mar­ket share in ship­ment terms. It also con­tin­ued to reign the fea­ture phones mar­ket seg­ment. Sam­sung was No. 2 with 13.8 per­cent ship­ment share while Micromax took the No. 3 spot with 10.3 per­cent share of the over­all mo­bile phones ship­ment in 2013.

Also, 65.8 per­cent of the to­tal smart­phones shipped in the coun­try were 3G smart­phones dur­ing 2013.

Key De­vel­op­ments in 2013

A key rea­son be­hind the rapid de­vel­op­ment of the In­dia smart­phones mar­ket in 2013 was its pen­e­tra­tion into lower price seg­ments. Par­tic­u­larly, the home­grown smart­phone ven­dors like Micromax, Kar­bonn and Lava con­sis­tently helped lower the en­try price points for smart­phones, launch­ing scores of mod­els in not just the sub-Rs 5,000 price seg­ment but also in the sub-Rs 4,000 and un­der-Rs 3,000

price cat­e­gories. It goes with­out say­ing that vir­tu­ally all of th­ese de­vices were on the An­droid plat­form.

Since th­ese price seg­ments, which were mostly con­sid­ered the fea­ture phone bas­tions, com­prised a large chunk of the ship­ments, of­fer­ing smart­phones in th­ese price seg­ments quickly gave a mar­ket share to smart­phones that would have oth­er­wise been hard to achieve.

A sig­nif­i­cant de­vel­op­ment in 2013 that laid the foun­da­tion for in­creased com­pe­ti­tion in the smart­phone mar­ket was Mi­crosoft’s ac­qui­si­tion of Nokia’s de­vices di­vi­sion. It en­sured that Nokia’s Lu­mia de­vices in par­tic­u­lar would have the fi­nan­cial back­ing of one of the most cash-rich tech­nol­ogy gi­ants glob­ally, one which was de­ter­mined to make its Win­dows plat­form a suc­cess in the smallscree­n seg­ment this time around.

From a mo­bile OS de­vel­op­ment per­spec­tive, two im­por­tant global events in 2013 that bore sig­nif­i­cance for the fur­ther de­vel­op­ment of smart­phone ecosys­tem in In­dia were the launch of the KitKat ver­sion of the An­droid mo­bile OS plat­form and even more no­tably, the launch of the Fire­fox mo­bile op­er­at­ing sys­tem.

Ma­jor Launches

Ap­ple’s iPhone 5s and iPhone 5c were among the most awaited mod­els, with

In­dia brands be­came stronger in this fis­cal eat­ing up the share of Tier 1 brands like Nokia and Sam­sung

Ap­ple launch­ing two mod­els in one go the first time ever. Also, 5s be­came the first smart­phone in In­dia to carry a pric­ing of more than Rs 50,000 for the en­try model. Sam­sung Galaxy Note 3, HTC One, Google Nexus 5, Moto X and Nokia 1020 also made big splashes.

The most no­table launch from Sam­sung was that of a much awaited Galaxy Note 3, which also grabbed much at­ten­tion due to the ac­com­pa­ny­ing launch of its smart watch Galaxy Gear. How­ever, as it turned out later, the smart watch failed to en­thuse the mar­ket, partly be­cause it had a price tag on the higher side but also be­cause the wear­able de­vice didn’t of­fer func­tion­al­i­ties that would be com­pelling enough for the users.

Nokia launched a num­ber of Lu­mia mod­els in 2013. Th­ese in­cluded Lu­mia 520 and Lu­mia 720 in the sec­ond quar­ter, and the 41-megapixel Lu­mia 1020 as well as the ph­ablet de­vice Lu­mia 1520 in the last quar­ter of Oc­to­ber-De­cem­ber. With th­ese launches, com­bined with the pre­vi­ous Lu­mia mod­els, Nokia was able to cover a much wider range of price seg­ments, the re­sult of which started show­ing in terms of a pos­i­tive build-up in its mar­ket share.

What Next?

The smart­phone mar­ket in In­dia is poised to ac­cel­er­ate fur­ther, can­ni­bal­iz­ing the fea­ture phones seg­ment in the process. And if the 2014 first quar­ter num­bers are any in­di­ca­tion then the process has al­ready kick-started.

A Cy­ber­Me­dia Re­search study showed that smart­phone ship­ments recorded a jump of 219.4 per­cent in the first quar­ter of 2014. A to­tal of 14.5 mil­lion smart­phones were shipped out of a to­tal of 58.9 mil­lion mo­bile phone units over­all. This amounted to smart­phone ship­ments grab­bing a 24.6 per­cent mar­ket share of the mo­bile phone ship­ments.

Not sur­pris­ingly, the fea­ture phones saw a steeper neg­a­tive de­cline of -6.5 per­cent over the year-ago quar­ter and clocked to­tal ship­ment of 44.4 mil­lion units.

Go­ing for­ward, it is ex­pected that the en­try of Fire­fox-based smart­phones would fur­ther ex­pand the mar­ket in the lower price seg­ments. Al­ready, In­dian brands in­clud­ing In­tex and Spice have an­nounced their Fire­fox-based smart­phones in the sub-Rs 2,000 price seg­ments. This has the po­ten­tial to open up a whole new cat­e­gory of ul­tra-bud­get mar­ket seg­ment. An In­tex re­lease ear­lier said its Fire­fox-based smart­phone Cloud FX would be tar­geted at first-time smart­phone users in tier 2 ci­ties and ru­ral ar­eas and is ex­pected to hit the mar­ket in first week of Au­gust.

How­ever, while the mar­ket is see­ing vol­ume growth in the mid­dle and bud­get seg­ments, it also has shown a good ap­petite for up­take in the pre­mium and ul­tra-pre­mium seg­ments as well.

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