Down but not out: The big four of Indian smartphone industry

Despite dip in sales, Micromax, Intex, Lava & Karbonn continue to assert influence over current smartphone users

When Nilesh Yadav damaged his mobile phone last December, after it fell from his hand, his friends had insisted that he buys a sleek Redmi phone with 4GB RAM. Or at the least a cheaper version of it, priced at Rs 6,999. But Yadav (26), a Delhi-based media professional, instead bought ELYT Dual from Intex. Apart from dual front camera feature at the same price, his familiarity with brand influenced the purchase decision, he says. He is not alone. There are other patrons of the Indian brand, who continue to stick to it during the downtime. 

While Intex, like Micromax, Lava and Karbonn – once the big four of Indian smartphone sector – has lost considerable market share in recent quarters, its influence over the market has not vanished. Despite free fall in shipment shares, these four Indian brands continue to hold well over a fifth of the 360 million local smartphone market by install base. As per available data from CyberMedia Research, till September 2017, Samsung held 32 percent share of the market by install base. Followed by Micromax that has 11 percent share of the market. Which effectively means that the Gurgaon-headquartered firm has some 40 million active devices currently used by consumers in the country. To put in perspective, this goes way beyond the presence Xiaomi has among consumers at present. While current market leader is selling well over eight million devices a quarter, its share among active smartphones remained at five percent.

Intex, the second largest among Indian vendors, has close to 18 million active devices and is at par with Xiaomi. While Lava and Karbonn followed. Despite being decimated by the Chinese storm that continues to grow stronger with Xiaomi’s increasing market share, analysts say, there is hope for the Indian brands.

According to Faisal Kawoosa, lead, Telecoms and SemiTronics, CyberMedia, retaining their existing customers would be an important factor for the local vendors, if they wish to make a comeback in the market. “They have a sizable base. Thus, instead of giving up they need to focus on repeat buyers. Targeting the affordable segment will be wise, instead of sticking to the mass market segment”.

Also, while the top five players in the market – Samsung, Micromax, Lenovo, Intex and Xiaomi – hold some 59 percent of the market the rest is fragmented among some 1175 brands. This offers an opportunity for the big four Indian brands to grow their sales – slowly but steadily, he says.

After getting routed from the retail market by early-2016, the local firms are now taking measures to control the damage. Micromax and Intex is working with Google to come up with cheaper smartphones that would offer a similar experience of a device currently costing over Rs 5,000. It is a bet that Google also needs to make and bodes well with the US tech giant’s India strategy. Android Oreo (Go), the mobile operating system that has been optimally designed for low capacity smartphones is the new bet for both. While Micromax has set an ambitious target of a Rs 2,000 smartphone on Android Oreo (Go), Intex is targeting the Rs 3,000 price range.

According to Nidhi Markanday, Director, Intex Technologies, while the firm rationalized its portfolio and updated all devices – from 3G to 4G – last year. This year, the focus has shifted to screen sizes larger 4.5 inches. “As per Gfk, we continue to be the top three brands under Rs 5,000. Offering value for money products at the lower end of the market, which is still quite large, has been our aim and it continues to be so”, she said.

Lava is among the first few to start a design center in India. It announced an investment of Rs 250 crore by 2021 to open the design centre at Noida. According to Hari Om Rai, chairman and managing director, Lava International, it will invest Rs 2,615 crore in setting up manufacturing units. And by 2023, Lava will have an annual production capacity of 21.6 crore mobile phones a year.

Source: CyberMedia Research