For Samsung, it is the second big victory in India. A few years ago, it had ended LG's long reign at the top of the consumer electronics market (again, in terms of revenue). The gap between the two has only increased since then. It is learnt that Samsung did business of Rs 27,000 crore in India in 2012, compared to LG's Rs 16,500 crore. In both the cases, Samsung has gained by not playing the price game; instead, it has focused on technology and new features on its products. Therein perhaps lies the lesson for all marketers: rock-bottom prices alone aren't enough to win over the Indian consumer, and stripping products of their features just to bring down prices may not always work. New entrants often play on price, even if it means booking losses, to lure customers and offer huge margins to dealers to push their products. Had that been enough, Samsung wouldn't have emerged on top. This could also be one of the reasons why Tata Motors' Nano, the world's cheapest car, is not the country's largest-selling car. The Indian consumer, though highly price-conscious, looks for value like everybody else around the world.
Samsung was the first to sense the large Indian appetite for smartphones and touchscreen technology. It literally created and owned the space, while all others focused on the no-frills, low-price segment. As it gained volumes, Samsung introduced smartphones at lower price points. This brought smartphones within the reach of a large section of the population. Today, the price range of its smartphones starts from Rs 5,200 and goes all the way up to Rs 40,000. (The top-of-the-line phones can be bought on monthly instalments.) In addition, it has smart-feature phones (these are like smartphones but you cannot download applications on them) from Rs 3,000 to Rs 4,500, and entry-level phones that start from Rs 1,100. This proves yet again the age-old wisdom that it is advisable to enter a market at the top and then leverage the high-end brand equity to move down the value chain, rather than doing it the other way round. Nokia joined the smartphone bandwagon with the Lumia. Though the range, which uses the Windows operating system, has done well internationally, in India consumers have preferred to go with Android-based phones. Voice & Data said that one of the mistakes Nokia made was to not introduce dual-SIM phones - hugely popular with those Indians who travel frequently from one city to another.
The Voice & Data survey also showed that Indian brands Micromax and Karbonn were placed third and fourth in the market, respectively, with a share of 8.72 per cent and 6.39 per cent in 2012-13. These brands have benefitted by playing at the lower end of the smartphone market. Their success clearly shows that the demand for inexpensive smartphones is very strong. It also confirms what marketers believe has been happening for a while: buyers are saving on non-discretionary expenditure so that they can buy a better mobile phone. It is perfectly possible for Nokia to bounce back from here. But that will call for some out-of-the-box thinking.