Indian smartphone brands miss 4G bus

indexSource: Business Standard, Aug 24, 2016

New Delhi: Popular homegrown smartphone brands seem to have fallen behind in the race to capture the 4G-enabled handsets market. As the buzz around 4G gets louder, smartphone companies are embracing the technology faster than ever.New launches in the sector are all aimed at capitalising on the growing demand for 4G devices and most firms, including market leader Samsung, are going all out to seize the opportunity.

In 4G-enabled handsets, the market share of Micromax, Intex and Lava – major Indian smartphone brands that dominated the space in the past three years – is lower than many of their close rivals. While Micromax, the biggest Indian mobile handset company in sales volumes, continues to hold on to its second spot in overall smartphone market, it is at the fourth spot in the 4G handset space.

At seven per cent, its market share in 4G handsets was half of its total smartphone market share of 14 per cent in quarter ended June 2016, data from Counterpoint Research show.

Intex, which holds the third spot with eight per cent market share in terms of smartphone units shipped, holds just three per cent of 4G LTE segment, and could not find a place among the top five.

Lava, which used to feature among top five smartphone brands till December 2015, before Lyf displaced it, has some two per cent share in 4G handsets. Its total smartphone market share is at around five per cent.

“LTE smartphones grew 264 per cent y-o-y during Q2 2016. One of the key reason behind the growth of LTE segment is original equipment manufacturers racing towards an all-LTE portfolio as a primary differentiator for the end users as hardware ceases to be a differentiating factor. Apart from this, the recent uptake of LTE services with aggressive pricing by all the major operators also led to a growing interest among end users to buy LTE-enabled devices,” Karn Chauhan, research analyst at Counterpoint Research said.

According to analysts, most of the Indian smartphone companies initially missed the opportunity and could not bank on the surging tide of 4G technology. While companies like China’s Xiaomi and Lenovo came up with 4G handsets as early as in 2014, most Indian firms like Karbonn entered 4G market only in end-2015.

According to Shubhajit Sen, chief marketing officer, Micromax Informatics, since the roll out of 4G technology in the smartphone space happened in semi-premium and premium price segments, Micromax found itself in a disadvantageous position. The firm, like most other Indian brands, does not sell handsets priced above Rs 20,000. “Also, 75 per cent of smartphones sold online now are 4G devices where clearly online-only brands have enjoyed considerable advantage, although we are a strong player on a couple of the major platforms,” he said.

“We were among the first to foray into 4G segment in 2015. Going ahead, we will be expanding our 4G LTE & VoLTE-enabled smartphone portfolio. We plan to have decent share of our 4G product portfolio,” said Keshav Bansal, director, Intex Technologies.

Online focus of various companies has paid rich dividends. Lenovo, for example, continues to dominate e-commerce sales channels and holds second position in online smartphone sales, after Samsung. Xiaomi, which used to sell only through e-commerce platforms till recently, is the third-biggest brand in the segment.

Samsung, with a 36 per cent share in the 4G LTE handset market, launched its first LTE smartphone in 2015. Its association with Reliance Jio, which took place in early-2015, helped it, sources said. Currently, all its handsets that are priced above Rs 7,600 are 4G VoLTE-enabled and compatible with Jio’s technology. To cash in growing online sale, it also reorganised top management and formed a dedicated team to look after online activities starting January 1, 2016. Samsung commands 26 per cent share in the overall smartphone market.

Micromax plans to take its 4G smartphone portfolio to 40 devices by end-2016 from 30 at present. According to sources, the firm is also working on a possible tie-up with Reliance Jio. Samsung has already formed a tie-up with Jio under which any customer who purchases a smartphone from Samsung’s A, S and Note series gets a Jio connection and preview offer of 4G data service for three months.

Sen says, currently 35 per cent of Micromax’s smartphone sales come from 4G devices which will go up to 60 per cent by the end of this year. “All our smartphones under the brand YU are VoLTE-enabled which makes them compatible for Reliance Jio network,” he added

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