Time for the indigenous companies to make it large

By Sahil Diwan

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There was a time when people associated mobile phone startups with Chinese companies, the ones supplying the market with duplicate, one-time use phones with no reliability. But things have changed now. Many indigenous companies have almost turned the table upside down now.

 

Companies like Micromax, Lava and Karbonn, have had a great start in their business. They entered the mobile segment by rocking the foundations of giants like Nokia and Samsung. Initially, the companies brought up feature phones that suited the needs of consumers demanding cheap phones. But it seems that these companies realized the potential of smartphones much quicker than their foreign competitors.

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Micromax posed a solid threat to Samsung with their Canvas series, aimed at middle class people. At a time when Samsung came up with easy EMIs, Micromax’s ads mocked the Korean phones by convincing people that the price of Canvas series is so low that you don’t need to opt for an EMI. A tagline in their ads- “Phone ke liye bhi koi EMI leta hai kya?” forced the customers to think about the reality.

 

Size does matter. This may not be true regarding a company’s resources but it is surely a universal truth for screen dimensions. No matter what the price maybe, the companies overwhelmed the people as they launched 5-inch screen smartphones. Certainly, they have oriented themselves with the needs of the consumers.

 

In a country troubled by threats to women’s safety, Iball led the show by sensing an opportunity to serve its customers with special phones. Iball Andi Udaan phone was launched with SOS feature that, when activated, rings siren, send messages to five emergency contacts and calls those contacts simultaneously along with tracking current position.

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Iball also revolutionised entry level smartphones by launching Iball Aasaan, a typically simple phone meant for the elderly. Micromax has come quite a distance since making its first mobile phones in 2008. It came up with Bling phone series that added a style factor to the phones.

Unarguably, indigenous companies did take extra pain in understanding the niche demands of the Indian consumers and then addressing those problems with innovative solutions.

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Not only do the companies serve the customers, they also serve the nation. At a time when rupee was losing its strength against the dollar, finance minister P. Chidambram, in his statement, said that electronics are also one of the reasons for India’s unfavorable current account balance.

The indigenous companies are slowly coming up with new plans for setting up manufacturing facilities pan-India. India will soon be able to save its precious foreign exchange reserves as new Made-in-India phones start coming up in the market.

 

Perhaps, the only portion in the smartphone market where these companies have not been able to hold a firm grip is the top-end bracket. This sector is basically driven by the factor of conspicuous consumption. People like to show off by owning such smartphones. Leading in this sector, Apple has broken all the records by pricing the iPhone up to INR 75000.

Price still holds a dominating factor in this segment but companies do need to justify the price of their phones with features, preferably the exclusive ones. Premium features like metallic body and chrome finish are also quite important. Its time for the Indian companies to size up their scope by coming up with high priced flagship phones.

The companies still have to face quite a few challenges before they get the chance of being under the spotlight. They cannot afford the billion dollar R&D games played by their gigantic competitors. Also, their sales are affected by the perceived notion in the market that their phones are unreliable and getting service is quite much a pain.

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In my opinion, Micromax’s earliest answer, against Note 2, the Canvas A100 can clearly point out the scope of improvement for Indian companies. The Canvas A100 smartphones had 5-inch screens as against the 5.5-inch ones on the Note 2 but the resolution was not half as detailed; the batteries were two-thirds the capacity; the processors had just one core compared to the four on the Note 2; and RAM was just a fourth in comparison.

 

It is true that Lava and Maxx mobiles did make a great entry into the market with justifiable marketing campaigns. But they are forgetting that the customers need to be reminded. In this sense, Micromax has played the right moves by investing in ₹30 cr Hugh Jackman campaign.

 

Now that India has replaced Japan as the third largest smartphone market, there is a lot of market share at stake. It is time for the companies to gear up for the challenge and add more teeth in their bite.

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