The Hindu Business Line : Newer brands pep up smartphone market with lower prices

In a market dominated by familiar names such as Nokia and Samsung, lesser known players such as Karbonn, Micromax and Coolpad are sneaking in almost unnoticed with ‘smart’ handhelds.

The Indian consumer suddenly has an array of new brands and models to pick from without causing a big dent in her purse. Needless to say, the market for smartphones (phones with advanced functions beyond what the average phone offers – such as Internet, email, in-built keyboard, music player, touch screen) in the country is set for competitive price play with prices ranging from Rs 5,000–11,000.

“The overall handset market is witnessing a price drop 7–10 per cent every quarter; the trend could be similar for smartphones in the coming months,” says Mr Sarup Chowdhary, Chief Executive Officer and Director, Reliance Webstore, a multi-brand digital retail chain from the Reliance ADAG group.

“The prices have dropped by 30-35 per cent in just 10-12 months,” says Mr Praveen Bhadada, Engagement Manager, Zinnov Management Consulting.

The smartphone is suddenly proving to be a “definite value proposition” for the Indian consumer. The “cost efficiency drive” in the market will also set the stage for mass-adoption of smartphones in the country, say industry experts.

IDC (International Data Corporation) estimates show that Indian mobile users bought 7,00,000 high-end/smartphones in the April-June quarter alone this year. Other estimates say the market is growing at more than 100 per cent every year.

While the price of branded smartphones in India hover around Rs 12,000, offerings from smaller players such as Karbonn and Coolpad at lower prices are certainly causing a churn in the market.

Reliance Webstore recently partnered with Coolpad Communications (a subsidiary of Hong Kong-listed China Wireless) to launch Coolpad smartphones priced at around Rs 10,000. “We are looking to have an attractive pricing strategy in India. While Coolpad 2938 is priced at Rs 10,999, we will introduce two smartphone models in India priced below Rs 8,000 soon,” said Mr Sami Al-Awati, Managing Director, Coolpad Communications.

Besides offering CDMA and GSM modes in the same handset, Coolpad smartphones operate on Windows CE and have features like multimedia and PDA (personal digital assistant) capability, e-mail, touch speed-dial, private-mode, SMS font-size change. Karbonn phones too come laden with rich features such as one-touch music player, advanced mobile tracker and dual SIM mode.

How does the economics work out for these players? “It’s the result of our R&D where our overheads are cheaper and development cycle faster,” says Mr Sudhir Hasija, Managing Director, United TeleLinks, which owns the Karbonn brand.

These players may have just started out but “encouraging consumer response” has prompted them to set their goals high. Karbonn, which sold 600,000 phones last month, is eyeing a 10 per cent market share by March 2010. Reliance Webstore expects 30 per cent of its handset revenue to come from Coolpad smartphones soon.

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