Nokia, Apple, Samsung, Sony Ericsson, HTC, LG, Asus and Research in Motion vie for a piece of the action.
Over the last few months, major handset manufacturers like Nokia, Apple, Samsung, Sony Ericsson, HTC, LG, Asus and Research in Motion launched premium handsets (smartphones), most are priced at over Rs 30,000.
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For instance, Airtel and RIM recently introduced the BlackBerry Bold smartphone to customers in India at a hefty tag of Rs 34,990. The device is expected to be available at Airtel-authorised channels nationally.
Smaller players like Asus, are eager to plug devices in the higher end. Asus M930, priced at Rs 27,900, was launched to compete directly with Nokia’s E90 communicator that was launched with the price tag of Rs 40,000.
The prices, in most cases, are almost double the US prices of similar and comparable models. A new Gartner survey, however, reveals that pricing is the key concern when Indians are buying a new device. Branding and design are also important but there is less interest in features such as Wi-Fi and Mobile TV, it concludes. So what are the sale prospects of these premium phones in a “price-sensitive” market like India?
The rise of the feature-rich phone, opine experts, has created a battle at the high-end of the market, with the main difference being the high-level operating system. Ryan Reith, senior research analyst with IDC’s Mobile Phone Tracker says, “We expect the competition at the high-end will help drive growth within the market and help move volume to higher-end devices.”
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LG Electronics, which has reinforced its position as the number 4 mobile phone vendor worldwide with shipments reaching a new record high, managed the feat on the back of its success in key emerging markets, well-managed costs, and a warm reception towards its premium models. Premium smartphones are around 2 per cent of the existing mobile device market but is a high profit margin segment. Anil Arora, business head (GSM Mobile), LG is hoping to sell 4 million handsets this year with at least half of the sales coming from the high end models.
Samsung Omnia, priced at Rs 39,999 for the 32 GB model, is seen as a decisive product for the company in India. Sunil Dutt, country head, Samsung Mobile says “We don’t think pricing is going be a disadvantage for us and since India has a buying culture of paying upfront, instead of a locked contract with an operator.”
Samsung is confident about Omnia and has no plans to look for operator partnerships to sell its product. Nokia’s Nseries, Eseries and feature phones generated the most revenue and profits for the company in the second quarter. Even with more than 20 new devices announced during the first half of the year, more models including a touch-based device are expected in the last quarter.
According to IDC’s Worldwide Mobile Phone Tracker, vendors shipped a total of 306 million units — an increase of 5.6 per cent from the 289.7 million units shipped during the previous quarter and up 15.3 per cent from the 265.4 million units shipped during the second quarter of 2007. “Since the start of the year, vendors have been wary of the potential decrease in demand for mobile phones,” states Ramon Llamas, senior research analyst with IDC’s Mobile Devices Technology and Trends Team in a statement.
“That has not stopped vendors from experimenting with and releasing a host of mid-range and high-end devices with GPS, touchscreen, and multimedia. This also goes for hotly-contested emerging markets, where vendors are introducing phones that offer features in addition to voice telephony. Reception towards these devices has been warm, and as we head into the holiday quarter, demand for these and other devices will no doubt increase.”
Last, but not the least, the price of the iPhone or any other handset retailing in US cannot be compared directly with the price existing in India, notes Anshul Gupta, Principal Analyst, Gartner. For instance, in the case of the iPhone, the cost of the 3G iPhone is $199 in the US for an 8GB handset. But the monthly data plan for consumers works out to around $30, and the monthly data plan for enterprise users is another $45.
So the total cost of iPhone over the life of contract (24 months) works out to around $920 for consumers and $1280 for enterprise users. The simple list prices of the iPhone — capped at $199 and $299 for the 8GB and 16GB devices, respectively, do not reflect “true costs”. There are many associated cost that apply. In India, the cost of 3G iPhone (8 GB) is RS 31,000 plus voice plan and GPRS charges.