At a time when India is witnessing an ever increasing demand on the intake for Smartphones, Mobility is presenting the success story of Smartphone Super Stars in India. This is an analysis of best selling smartphones in India and how they are preparing to face the Big brands from China in a better manner? Mobility taking a sneak peek into how these brands have emerged in India and changed the whole market scenario in the smartphone market. We have also asked these leading smartphone players about their thoughts behind this names and how much they are prepared for the Chinese smartphone invasion.
Whether it is the globally much revered brands such as HTC, Nokia or Indian manufacturers like Lava, Iris or Intex, smartphones are truly selling like hot cakes today. Worldwide mobilephones sales, which includes both smartphone and feature phone sales, increased to 1.81 billion from 1.75 billion YoY. Smartphone sales in India increased by 166.8% making it the world’s fastest growing smartphone market in the last quarter of 2013, according to Gartner.However, agile business and marketing strategy with a mix of product innovation will decide the future winners in this war of India’s smartphone supremacy.
When asked about the importance of naming the Smartphone series Faisal Siddiqui, Country Head, HTC India says that, “HTC is a company that has a history of taking bold risks, to challenge the status quo and drive change within the mobile industry. The many world firsts delivered by the company since its creation in 1997, culminated in the launch of the globally acclaimed HTC One family in 2013 – HTC’s best-ever selling product family. By taking the iconic design DNA of the HTC One, and applying exciting colors and premium materials, we are giving the HTC Desire family its own distinctive flavor. What this means is that people who want a more affordable phone that reflects their individuality won’t have to compromise. This is the story behind our ‘One’ family and ‘Desire’ series which has allowed HTC to create a distinct identity in the market.”
Speaking about the brand philosophy, Tarun Verma, Head- Marketing, Lava International Ltd says that the smartphone market today is flooded with Me-too specs and features which cater largely to first or second time smartphone users. There is also a large segment of customers today who are well educated about smartphones and can appreciate the nuances of specs that lead to a completely different experience.
“The Iris sub-brand has products that target consumers at both end of the spectrum, a first time smartphone buyer who may be looking for an entry level product and a repeat buyer who is looking for an enhanced smartphone experience. The sub-brand is positioned on the lines of ‘We put the Art in Smart that essentially signifies that the products are great aesthetics without compromising on the functionality side of it. All Iris products are designed on this theme and therefore sport a beautiful design exemplifying sleekness & elegance with best in class features; ultimately offering a great user experience. Churning out such products has largely been possible due to the fact that Lava is the only Indian company to have a 203 member strong Product and R&D team in China and this number is growing with each passing day. Lava has a state of the art testing and quality control facility in China. This infrastructure gives us control on product engineering and design. We also have full control on component suppliers and manufacturing process. This ensures that our products are more reliable and give better experience even with the same specifications. To add to it, with a strong software engineering team based in Bangalore and a deep understanding of the needs of Indian consumers, we are gradually changing the user interface on our devices. We are building capability to add consistent value to the consumer’s life even after the purchase and have built many applications that have been liked by our consumers. The recently launched Lava Iris X1 is a testimony to the success of the Iris sub-brand. Currently, X1 contributes to nearly 30% of the total smartphone sales of Lava brand,” he explained.
As per the views of Pankaj Rana, Business Head, Smart Phones and Tablets Panasonic India, in order to expand its horizons in the market, Panasonic entered the smartphone segment through the launch of Panasonic P51 which was equipped with high-end innovative features but due to the high-price point (Rs. 26,990), the phone did not receive the right traction in the competitive Smartphone market.
“After a thorough analysis of the India smartphone market and the consumer behavior, the company made its second move through the launch of P11, T11, T21 and T31 which focused around the broad messaging of offering basic Android models coupled with an affordable pricing experience with built-in interactive features. This received a positive response and could make an impact in the market. With its increased reliability in the market and expanded customer base, Panasonic recently launched the P31 and P81 offering affordable pricing along with customized features. The launch was a huge success as Panasonic focused on unique software & design based features. These handsets come with latest and most innovative features and have attracted huge customers by its performance and reviews,” he adds on.
Talking about the brand philosophy, Sanjay Kumar Kalirona, Senior General Manager – Mobile Business, Intex Technologies (India) says that Intex has been at the forefront of innovations. At Intex we have the power to understand and identify customer needs which we then work with to design and create path breaking technology.
“We believe technology has no barriers. It should be for everyone and it should result in customer delight. In all our products the single most important thing we intend to offer is customer satisfaction. Satisfaction does not always come from paying a higher cost of acquisition but from the fact what you can achieve through that technology or gadget. Our strategy has always been around the common man’s dreams and we hope to build upon that every day. The Aqua range has been widely accepted by our customers across India. The Aqua Style has been designed keeping in mind, the need for style and quality. We are focused on increasing our footprint in Karnataka and I am certain that our association with Sudeep will be well accepted by the regional audiences. With Aqua Style, we aim to empower youngsters looking for a mobile that speaks about their personality,” he explains further.
As believed by many market experts, the evolution of brand is very for a smartphone’s success ahead and this is where a lot of brands are scoring over others in a long lasting manner.
“For our One series, we are widely acknowledged as the best smartphone in the reviews for last two years. Internationally also, Consumers love our phones – we are the third most preferred smartphone brand in the world (Hall & Partners). The influencers and trend-setters in the mobile space have always loved HTC for our innovation and willingness to take risks, and this year we will bring that brand promise to more people. Positioning and selling our HTC Desire range – we didn’t have enough spectrum of product last year which was one factor why our market share dropped. But we have now rectified that. In Desire 210, 310, 516, 616 and 816; we have some fantastic models in market already this year. We will have more beautiful phones with some knockout but simple benefits, jumping off the shelf soon,” explains, Faisal Siddiqui from HTC India.
According to Tarun Verma, Head- Marketing, Lava International, Iris is Lava’s sub brand that offers smartphones in the 3k-12k price segment. Knowing that an entry level smartphone buyer has a different profile & needs from a mid-segment smartphone buyer, the sub brand was further divided into 3 series.
Lava Iris series caters to the entry level smartphone consumer with products priced between 3k to 6k, Lava Iris X series caters to the mid segment smartphone consumer with products priced between 6k to 9k, Lava Iris pro series caters to the slightly higher mid segment smartphone consumer with products priced between 9-12k.
“The flagship product in the 9-12k price segment is Iris pro30 was launched in January this year, followed by Iris pro20. Iris 504q plus is another offering in this segment which was launched a couple of months back after the success of its predecessor Iris 504q (launched in June’13). In the mid segment, X1 is the flagship smartphone for the brand while in the entry level series, there are a plethora of 2G/ 3G enabled smartphones for the 1st time smartphone buyer. Currently, the brand has more than 20 products spread across all the 3 series and is targeting a market share of 7.5% by volume in the sub 10k smartphone category by the end of this FY,” he explains.
Pankaj Rana from Panasonic India, said, “With the success of P31 & P81 Smart Phones in the Market, we have further evolved our strategy of product development to focus more on Software and design innovations. Soon Panasonic ELUGA Series of Smart Phones will be launched in the Indian Market with unmatched features and design. This Series will primarily focus on making consumers smart phones experience better over competition with proprietary Panasonic technologies in the all devices. ELUGA Series of Smart Phones will mark a new beginning of Smart Phones Experience for Consumers.”
Speaking about the brand evolution, Sanjay Kumar Kalirona, Senior General Manager– Mobile Business, Intex Technologies (India) says that Intex has been at the forefront of innovations.
“At Intex we have the power to understand and identify customer needs which we then work with to design and create path breaking technology. We believe technology has no barriers. It should be for everyone and it should result in customer delight. In all our products the single most important thing we intend to offer is customer satisfaction. Satisfaction does not always come from paying a higher cost of acquisition but from the fact what you can achieve through that technology or gadget. Our strategy has always been around the common man’s dreams and we hope to build upon that every day,” he said.
“The Aqua range has been widely accepted by our customers across India. The Aqua Style has been designed keeping in mind, the need for style and quality. We are focused on increasing our footprint in Karnataka and I am certain that our association with Sudeep will be well accepted by the regional audiences. With Aqua Style, we aim to empower youngsters looking for a mobile that speaks about their personality. Our new television commercial on Aqua i5 HD is stylish, elegant and youthful which features our brand ambassador Farhan Akhtar. The advertisement is aimed at highlighting the high definition quality which is an important feature desired by users in a smartphone. With our recent TVC campaign we aim to reinforce our imagery as a youth centric brand catering to the needs of young India by giving them the best picture quality and value for money,” concluded, , Sanjay Kumar of Intex Technologies.
Dwelling upon the future plans for HTC in India, Faisal Siddiqui from HTC says that, “You will see us continue our brand evolution and you will see us hero our products proudly: both the HTC One family and the HTC Desire family so that it is clear that there are beautifully designed phones for everyone from HTC. Focused and effective marketing and other forms of communication – we will engage more people in the HTC story and give them the chance to experience our products in a way that suits our pocket but also plays to their passions. Getting our share price back to levels where it inspires confidence and rebuilds our credibility – this is about tight fiscal management, excellent execution and having a more accurate corporate reputation than we have achieved in the past,” he adds on.
Tarun Verma, Head- Marketing, Lava International says that, “We are already selling more than 1.7 million handsets per month and have an 8.7 % market share in the overall category by volume. The entire value chain is working with ownership to achieve one goal i.e. to become a global consumer from India. To be able to achieve this, we need to build great products to delight the consumers. For this we are focusing on a two pronged strategy for our long term growth: Manufacture great products at the right cost to serve customers across the world. For this, Lava has plans to set up a very large manufacturing base in India and the company is in the process of bringing the component ecosystem here from various countries. We believe that India has the potential to compete with any other country in the world as our cost of manufacturing is much lower and creating a large employment base in India is a huge inspiration for us. Create a platform that is capable of consistently adding value to the consumers’ experience post purchase and help them unleash the potential of internet. This will increase the affinity towards the brand in the long term.”
According to Pankaj Rana from Panasonic India, “There is no doubt in the fact that in order to sustain in the market, brands have to undergo constant innovation to deliver products as per the expectations of the customer. It is a trend that smartphone customers are never satisfied and always want more and more benefits. We at Panasonic understand this need and develop products accordingly; and are coming up with the launch of ELUGA Series of Smart Phones which is expected to set a milestone in the history of smartphone segment. It highlights the innovation and elegance while focusing on the stylish design.”
According to Sanjay Kumar Kalirona, Senior General Manager– Mobile Business, Intex Technologies (India), “At Intex development centre, we constantly conducts surveys to study customer preference and usage patterns. We launched Aqua i5 HD at below 10k price tag for users who adore image quality and love seeing the virtual world come alive at a 5-inch OGS display screen. We at Intex, aim to strengthen connect with consumers while we understand their needs and constantly innovate to meet the aspirations at an affordable price point. Last year, Intex sold 11.5 million handsets out of which, Smartphones contributed over 1.5 million. Intex has already launched 32 mid-segment smartphones under its Aqua range and has plans to launch around 8 more models during the next quarter.”
Rise of Chinese Brands
With the rapid rise in demand in smartphones, there is also a surge in the availability of Chinese smartphones in India and Indian manufacturers as well as global brands are facing the heat coming from large presence of Chinese brands today. However, right product innovation and brand association is keeping the Chinese threat at bay.
Faisal Siddiqui of HTC, explained, “HTC does not feel threatened by the entry of any other mobile brands be it Chinese brands or local. Nor do we intend to compete on price, which is essentially one of their biggest USPs for many of those brands. The first thing that you will notice when you look at our phones is the better design and better form. We put our heart, mind and soul into it and can compete on pure hardware specs but it will hurt our brand in the long term if we cut corners and compete on cost. Though there will always be a cluster of vendors fitting into a cluster of consumers. We’re will not compete on those parameters.”
Tarun Verma, Head- Marketing, Lava International, explains, “Yes, we are watching the upcoming Chinese brands closely. They offer good quality products and depending upon the stakes that they plant, they will definitely cut a few slices from the Indian handset market pie, especially from Samsung & Indian brands. However the Indian brand shave a few cards up their sleeves to which the Chinese brands would not have a match at this point in time. Indian players have a distinct advantage in the form of their deep-rooted distribution network and greater understanding of the consumer’s psychographics and demographics. Indian players have been better able to understand the needs of the consumer and bring products according to their need. For example, Lava launched 3G enabled affordable smartphones last year in the range of Rs 4000-5000 to help feature phone users migrate to smartphones and reap the benefits of 3G connectivity and device. “
“Within the Chinese ecosystem, it is very much possible to offer products with best in class components however, it is important to understand the consumer needs. Ultimately the consumer has to see value in the proposition being offered. Chinese brands will take at least 4-5 years to build a robust foundation in distribution set up, sales structure, effective after sales delivery & marketing intelligence. In this scenario, the Chinese brands will need a strong vision, perseverance, considerable experience and maturity to compete in the Indian market and build a strong foundation for sustainable growth. Nevertheless, the opportunity provided by the smartphone boom in India is being cashed in by all players- the global brands, Indian brands, and now the Chinese brands. The consumer will benefit from the abundant options available to him,” he adds on.
“Being one of the players in the competitive smartphone segment, it becomes necessary for us to keep a constant watch on the competitors and upcoming brands in the market. In terms of current market image that Chinese brands have, there is still much time for these brands to be accepted as reliable. They will have to make a lot of efforts to sustain in the market with quality being a major issue. Customers have become very experimental, especially the teenagers, but they are smart enough to choose the best for them according to their need and mere experimentation with the handsets cannot be very benefitting to the brands. To sustain in the market these brands have to make their own space in the segment,” concluded, Pankaj Rana of Panasonic India.
Rise and Fall of a Phenomenon called Nokia
Nokia started way back in the year 1865 from a pulp mill in south-west Finland. A century and a half later, Nokia’s handset business is being bought by Microsoft for €5.44bn after a troubled few years. But all said and done, the company once undisputedly ruled the global handset turf for many years. Here is the Nokia timeline.
In 1865: Mining engineer Fredrik Idestam sets up a wood pulp mill at the Tammerkoski Rapids in south-western Finland.
1871: The Nokia name is born, inspired by the Nokianvirta river on the banks of which Idestam opens a second mill.
1898: Eduard Polon founds Finnish Rubber Works, which later becomes Nokia’s rubber business, making everything from rubber boots to tyres. Nokia wellies are still made today, though not by the telecoms company.
1912: Arvid Wickstrom sets up Finnish Cable Works, the foundation of Nokia’s cable and electronics business.
1981: Launch of the Nordic Mobile Telephone service, the world’s first international cellular network, and the first to allow international roaming.
1982: Nokia introduces the first car phone – the Mobira Senator – to the network. That same year, the Nokia DX200, the company’s first digital telephone switch, goes into operation.
1984: Nokia launches the MobiraTalkman portable car phone – a chunky piece of kit but a start.
1987: Nokia introduces the MobiraCityman, the first handheld mobile phone. It weighs in at 800g and comes with a price tag of 24,000 Finnish Marks (about £3,400). The Soviet leader, Mikhail Gorbachev, is pictured using one to make a call from Helsinki to his communications minister in Moscow.
1991: The Finnish prime minister, Harri Holkeri, makes the world’s first “global system for mobile communications” call, using Nokia equipment.
1992: Nokia launches its first digital handheld GSM phone, the Nokia 1011. The Nokia president and chief executive, Jorma Ollila, decides to focus on mobile phones and telecommunications, and the process begins of selling off its rubber, cable and consumer electronics divisions.
1994: Nokia launches the 2100 series, the first phones to feature the Nokia Tune ringtone. It goes on to sell 20m phones worldwide in the 2100 series. Nokia’s target had been 400,000.
1998: Nokia becomes the world leader in the mobile phones market.
1996-2001: Nokia’s turnover increases almost fivefold from €6.5bn to €31bn.
1999: Nokia launches the Nokia 7110, a phone capable of rudimentary web-based functions, including email. It uses the Orange network to access the internet using Wireless Application Protocol (WAP).
2000: Nokia does a deal with music publisher EMI enabling users to choose their favourite tunes as their ringtones.
2001: Nokia launches its first phone with a built-in camera, the Nokia 7650. But a profits warning, blamed on a slowdown in the mobile market, stuns investors. It announces plans to cut 1,000 jobs, but things start to look up by the end of the year.
2002: Nokia launches its first video capture phone, the Nokia 3650. It also launches its first 3G phone, the Nokia 6650. With 3G technology, phones can now be used to browse the web, download music, watch TV on the move, and more.
2004: Nokia reveals that although it is still the market leader it is losing share to its rivals, with its 35% share comparing with a target of 40% as it falls behind with its new product range.
2005: Nokia sells its billionth phone – a Nokia 1100 – in Nigeria, and global mobile phone subscriptions pass 2bn.
2007: Nokia is forced into one of the world’s largest product recalls after it admits the batteries in 46m phones could be faulty. Meanwhile, a longer-term problem emerges: Apple launches the iPhone.
2008: Nokia reports a 30% fall in third-quarter profits. Nokia smartphone sales fall by 3.1% during the quarter, while sales of Apple iPhones grow by 327.5%.
2009: Nokia announces plans to cut 1,700 jobs worldwide as the recession hits mobile phone sales. Nokia admits it was slow to react to the rise of new devices such as the iPhone and plans to fight back. But it is too late to avoid the first loss in more than a decade.
2010: Competitors such as the iPhone and Android-based devices are posing a serious challenge to Nokia’s future. It appoints former Microsoft man Stephen Elop as president and chief executive. Nokia cuts a further 1,800 jobs despite a rise in profits.
2011: Elop warns staff “we are standing on a burning platform”, and announces a strategic partnership with Microsoft days later to compete with Apple and Google’s Android platform. Nokia cuts a further 4,000 jobs worldwide from its 65,000-strong workforce. Elop denies it is in talks about a takeover by Microsoft. Nokia is overtaken by Samsung and Apple in the smartphone sector as profits and sales dwindle. Nokia launches new smartphones.
2012: Nokia cuts 4,000 jobs and moves smartphone manufacturing to Asia. Shares fall following a profits warning and it slumps to a €1.3bn loss. Analysts foresee a possible takeover by Microsoft as it cuts 10,000 more jobs and announces its last factory in Finland will close.
2013: Nokia returns to profit after an 18-month spell of losses. Microsoft buys Nokia’s handset business for €5.44bn (£4.6bn)
Mr. Faisal Siddiqui, Country Head, HTC India
“HTC is a company that has a history of taking bold risks, to challenge the status quo and drive change within the mobile industry.”
Mr.Tarun Verma, Head- Marketing, Lava International Ltd.
“Indian players have a distinct advantage in the form of their deep-rooted distribution network and greater understanding of the consumer’s psychographics and demographics.”
Mr. Pankaj Rana, Business Head, Smart Phones and Tablets, Panasonic India
“Customers have become very experimental, especially the teenagers, but they are smart enough to choose the best for them according to their need and mere experimentation with the handsets cannot be very benefitting to the brands.”
Mr. Sanjay Kumar Kalirona, Senior General Manager– Mobile Business, Intex Technologies (India)
“Intex has already launched 32 mid-segment smartphones under its Aqua range and has plans to launch around 8 more models during the next quarter.”