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Samsung, though still the market leader, has been fighting competition from local Indian manufacturers such as Micromax, Karbonn and Lava on one border and foreign players like Apple and Nokia on another.
Its market share in value terms fell from 47.4 per cent in July to 43.3 per cent in December last year, according to a recent market study by a research firm. In volume terms, too, its share slid from 46.4 per cent in July to 35.8 per cent in December.
The foremost challenger to Samsung has been the Finnish mobile phone manufacturer, Nokia. Its Asha series of smartphones launched last year was quick to upset the market balance. During the fourth quarter of 2012, Nokia sold 16 million Asha phones globally. In India, the Asha 305, priced at Rs 5,029, became the best-selling model during the period. The company is banking on its Asha series to fire up sales at the bottom of the pyramid, and plans to launch two more models in the entry segment soon. (Click here for chart)
However, opinion is divided on whether Asha phones can truly qualify as a smartphone. Many believe that the Asha series is a feature-packed phone that falls short of being a smartphone and, therefore, should not be clubbed with other smartphones when arriving at the market share of various players.
Nokia, meanwhile, is also pushing its Lumia series of phones. "In a little over a year, we have introduced 10 Lumia devices, each at a new price point, each delivering an uncompromised Lumia experience. Of these, eight are already in the market," says Vipul Mehrotra, director (smart devices), Nokia India.
The company is also planning to bring more Lumia models at even lower price points. "We are working closely with Microsoft to offer Nokia Lumia devices at newer price points, thereby offering the Windows Phone and Lumia experience to newer consumers," says Mehrotra.
Another blow was dealt to Samsung with the launch of Apple's iPhone 5 in November. Apple has been pushing its products through attractive bundled as well as monthly instalment offers, which have helped the company double its market share to about two per cent in December from less than one per cent (estimated) in July, according to a recent study by an independent market research firm. Apple also fuelled growth by cutting price of its earlier versions of the iPhone models to push sales. In value terms, too, Apple's share has doubled to 6.7 per cent in December 2012 from 3.3 per cent in July.
Amid this, Indian players like Micromax, Karbonn and Lava, among others, have also emerged as serious contenders by playing the price game and meeting the aspirational needs of the Indian consumers.
Says S N Rai, chairman of Lava Mobiles: "The urban market has begun responding to Indian brands, earlier there was a perception issue. But using international reference designs to make smartphones has helped us in attracting buyers."
The share of domestic manufacturers in the Indian smartphone market was at 17 per cent of the total handset sales in 2012, estimated at 17 million, and is growing at about 80 per cent per annum. The domestic brands, mentioned as "others" in the study, saw their market share (by volume) rise from 4.2 per cent in July to 12.1 per cent in December 2012.
While Samsung declined to comment on the market share, Asim Warsi, vice-president, Samsung Mobile, says: "We are confident we will further consolidate our value leadership in the overall Mobile as well as the smartphone segment"
Its warhorse will be the new phone, Rex. Samsung's Rex, priced between Rs 4,280 and Rs 6,490, will directly compete the initial four models of Nokia's Asha series. At the top end of the market, Samsung is trying to push its Galaxy series.
"We have introduced a very attractive monthly installment scheme for six of our Galaxy devices that is available for our consumers at the smartphone cafes and other small shops. We will be further strengthening the line-up both in the premium and the mid-segment later this month with innovative product introductions," says Warsi.
Besides its key purpose of fending off competition from Nokia's Asha series, there is another reason why Samsung launched the Rex series. According to the study cited above, about 40 per cent of the smartphones sold in urban India (cities with a population of more than 50,000) in December 2012, were priced below Rs 7,000. The share of smartphones in the range of Rs 8,000 and Rs 12,000 was 24.5 per cent and for phones prices above Rs 20,000 was just 10.7 per cent.
After the launch of Rex, analysts expect the Korean major to report better numbers this quarter. The company while strengthening its focus on the lower end of the market, will also launch new products to bolster its portfolio in the upper end of the market.
"Besides, at the upper end of the spectrum, we will continue to strengthen our portfolio of the next generation devices like the Galaxy S3, Note 2 and others that are slated for introduction this year," says Warsi.
The smartphone market has never seen such activity. Buyers aren't complaining.
