India being the home of second largest subscriber base
attracted all international mobile device vendors. At the same time more than
130 domestic companies also frayed into the segment to capture market share.
Post liberalization in 2001 – 2004, there was burst of new domestic companies
entering into market place and started challenging international players. In
2008-2009, the domestic companies started to capture market share from
international brands like Nokia, Motorola, Sony (fka. SonyEricsson). With the
evolution of Android OS and adoption of Chinese contract manufactures, the
domestic player moved up in the ladder and replaced many top international
brands from Top 5. The market leader Nokia, Motorola, Sony Ericsson &
Blackberry product disruption in the market place also offered competitors to
increase their market share through low cost model targeting rural subscriber
and tier 3 customer bases in rural sector. According to Gartner, the unit
market size of mobile device would grow to 251 Million with a growth of around
15% YoY2. It pop ups a query about the competitive state of domestic mobile
device companies. The recurrence of Nokia in early 2012 and release of Asha
series, industry dynamics of budget Smartphone and feature phones has changed.
The focussed entry of Huawei, ZTE, Acer, HTC and Sony has increased competitive
environment. In order to maintain the market share and match with the
International players, the domestic mobile companies are playing on the price
point, preloaded content and trying to match with international player on the Smartphone
front.
With the negative growth rate on net subscriber addition and
lower refreshment sales, both the international and domestic players are
witnessing lower to negative revenue growth with market share erosion. The new
entrants like Huawei, ZTE are grabbing market share from competitors and are
moving to Top 10.
Moving forward, it is expected that many domestic companies
would be forced to shut down their operations as volume vs. price is the key
indicator instead of price vs. performance. The Smartphone segment will be
dominated by leading international players and top five domestic companies as
the target segment purchasing decision factors would be Brand, Build, Features,
Durability and Price. With the deployment of data network, more than 120
million paid data userbase, data centric product offer would encourage
subscribers to opt for entry to medium level Smartphone at an affordable price
points. It is expected that by end of FY 14; Smartphone share in Indian mobile
device market would cross 25%. The leading International players such as Nokia,
Samsung would cement their leadership across feature and Smartphone segment
whereas Apple, Samsung, Nokia and Sony would be fighting with their differentiated
design & feature rich products for high worth subscribers (2% of total
subscriber base). The domestic players would be fighting for maintaining their
market share. The launch of BB10 platform, and new device would attract
Enterprise subscriber base. International players are launching their content
portal and integrating portal widget to enable consumer base access content
whereas domestic players are bundling content with device to attract consumers.
It would be interesting to see, how few domestic player successful entries into
Tablet market is going to impact international players.
In conclusion, the domestic mobile device players are
redefining their strategy to bypass International player. Currently its
survival story for small player whereas growth story for market leaders. The
price point neutralization by International players changed the device market
place dynamic
