The Hindu Business Line : Motorola puts premium handsets in the picture

MOTOROLA India Ltd believes that cellular handsets are not merely used for phone calls, but increasingly for special functions, such as sending pictures. The trend has led the company to create a special distribution system to cater to people interested in high-end handsets.

Motorola is working on associating itself with different kinds of shops. One would stock only Motorola products, while others would reserve space only for the company's handsets, said Mr U. Narendra Nayak, Director of Sales & Distribution for South-West Asia.

The high-end handsets, which cost about Rs 20,000, need a "retail ambience" that would help a prospective customer understand the product, Mr Nayak said. "The customer is not going to buy without seeing." Motorola expects to have between 200 and 300 such outlets across 20 cities by the end of the year.

The exclusive outlets for high-end products will complement Motorola's mainstay: the C 200 handsets that cost about Rs 3,250.

Mr Nayak forecast that the handset market would grow by over 50 per cent in 2004 to reach about 25 million. He forecast that the company's growth would be faster than that of the market.

Adding to a positive environment for handset manufacturers such as Motorola and Nokia has been declining competition from the grey market. Mr Nayak felt the reduction in import duty over the last two years for handsets and a simultaneous reduction in sales tax by most states have made branded handsets more competitive in relation to grey market instruments.

He felt grey market handsets today hold about 20 per cent of the market share as against about 80 per cent a few years ago.

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