What will you do to get your first Android?? screamed the ads of one of India?s homegrown mobile brands, Micromax. It was an ad campaign that marked for many the coming of age of Indian handset companies. Why? Because it was Micromax?s big entry into the Android club, where only the big boys played. Yes, this open source mobile operating system (OS), with the weight of Google behind it, is rapidly becoming one of the most sought after features in the swelling smartphone segment around the world, and certainly in India.
Indian brands made quite a mark in the overall handset market in the country by making big MNC handset brands bleed in terms of market share, and are now ready with another assault. This time, they are eying the Android-based smartphone pie. Apart from Micromax, which entered the segment a couple of months back, two other Indian brands, Spice and Videocon, also launched their first Android phones in the last six months. And what is much more interesting is the way other Indian brands are now lining up to clutter 2011 with a flurry of Android phone launches, at price points lower than what the top brands are offering. With the imminent rollout of full 3G services in a matter of a few months, the buzz increases manifold.
According to experts, the very nature of the OS makes it viable for all players, big and small, and further provides an opportunity to indigenous brands to compete with global players in India?s high-churn handset market. ?As the Android OS is available for free or a minimal licence fee, it allows vendors to reduce the bill of material or BOM. The Android marketplace also offers a large number of applications, made available by the high interest amongst the developer community around the world to develop applications on this open source OS. However, this could also be a leveler, as the Android OS and marketplace are open to use by all vendors, large or small,? says Prasanto K Roy, chief editor, Dataquest & CyberMedia Research.
Numbers concur, as 3Q 2010 saw a strong quarter-on-quarter growth in smartphone sales (shipments) in India by 34.2%. And 9.4% of smartphones shipped in 3Q 2010 were based on the Android OS, as compared to 2.9% in 3Q 2009. The number of models with Android OS also increased to 19 in 3Q 2010, as compared to just two models in 3Q 2009, according to the latest figures available with IDC India.
Indian brands are going gaga over the possibilities that the Android OS opens for them in the premium segment of mobile phones. ?According to Gartner, India is going to be a smartphone driven market by 2014. As of now, it stands at 6% of the market in terms of sales, while it is expected to reach 25% by 2014. For us, right now we have 8% of our portfolio in Android-based smartphones. However, by the end of this year, we plan to expand it to 20% of our total portfolio. That means that we are looking at having eight-ten Android phones by the end of the 2011-12 financial year. We?ll start immediately with two-three models in the first quarter itself,? says Anuj Nangia, vice-president (handsets), Spice. Spice was the first Indian brand to launch Android-based devices with two phones and a tablet in the second half of 2010.
Other brands are talking in similar voices. ?We?ll launch our first Android-based models by March end or early April. We?ll be launching two-three models together, which would be tentatively priced between Rs 6,000 and Rs 7,000. Then will watch the developments before deciding on expanding this portfolio, as things change way too fast in this sector. So we don’t want to be rigid about our plans,? says Vinayak Lal, marketing head, Intex Technologies. The first quarter of the coming financial year is also what Karbonn, Lava and Zen are eyeing to announce their entry into this segment, with expected price points roughly between Rs 6,000 and Rs 8,000. Micromax declined to comment on its future plans for the segment, owing to the silent period before its IPO.
Jaideep Ghosh, executive director, KPMG Advisory Services, says Indian brands are now looking for better revenue generation through this segment, and also looking to consolidate their position in the metro markets of the country. ?Overall, the Indian brands have been able to garner a share in the market, at least in terms of the penetration and the number of handsets. Now, there is an attempt to similarly capture a sizeable share of the total revenues generated by sales in the cell phone segment, and that is where Android comes in for them. The motivation for Indian brands to get into this segment, it seems, is to pocket a bigger share of the revenue pie,? he says.
Shashin Devsare, executive director, Karbonn Mobiles, concurs, ?Of course, revenue share enhancement is something we expect would happen. And we did start with the non-metros, but eventually found great traction in the metro markets as well. Don?t forget, a huge replacement market is there in the metros, and is growing rapidly. This segment will cater to that market too.?
So are the Indian brands feeling up to the challenge of competing with high-end global brands in the Android space? ?I am quite confident we will be able to dent the market for the MNC brands riding on cost-effectiveness, affordability, and applications customised especially for the Indian users,? says Devsare. Nangia feels Indian brands can really outperform the global names because of their extremely quick turnaround time. ?The advantage we as an Indian brand have over MNC brands is that we can customise the latest technology to the needs of Indian consumers and bring it to the table in quick time. The duration of the development cycle and the time to market is the key thing here. The MNC players are not very quick with it, and their time to the market is slower than the speed at which the technology, and in this case, the OS, is upgrading,? he says.
Most brands are looking at settling at a sub-Rs 6,000 price tag for their Android phones, which is quite low as compared to what the MNC brands are offering. However, analysts feel it would still take some time for Indian brands to actually get a substantial share of the segment. ?As of now, we would not see a lot of churn in this segment, which is at a nascent stage still, despite of the entry of Indian brands. Simple reason being, there are not many handset models available as options overall. However, once there are well established portfolios by Indian brands in this segment, we can expect quite a growth in their share. Their prices, too, would be far less as compared to the global brands. That again will be a defining factor once most players have a sizeable Android portfolio,? says Ghosh. And the industry also seems to understand this. ?The MNC brands have not been able to bring volumes in this segment and volumes is exactly what Indian brands will bring to the market. The face and the dynamics of this segment, as well as the market, would be completely altered then,? says Rai.
However, there are those as well who, are as excited about Android, but would like to take cautious steps, like Bharti?s Beetel brand. ?We will enter the Android range, but at the right time. We are not in the race to be the first ones to introduce technologies in the market. What is more important is to enter those segments, that can add value to consumers at affordable price points. We are surely looking at it very seriously, and we will enter this segment with relevant and meaningful applications at a point of inflection between features, applications and affordability,? says Vinod Sawhney, ED and CEO, Beetel Teletech.
Still, one thing?s for sure, that the little green robot shall be visible on an increasing number of handsets in India in the months to come, and quite a few of them would be those of Indian handset brands.
