Mobiles & Tablets

Chinese cell-makers up ante by going low cost in India

Rajesh Kurup Mumbai | Updated on November 27, 2017




A Chinese invasion of a different kind is taking the Indian telecom sector by storm. During the past eight months, as many as three Chinese mobile handset manufacturers have forayed into India, stirring up the data-hungry market by launching smartphones for less than half the existing price.

The latest being Xiaomi, hailed as the ‘Apple of China’, offering smartphones at ₹14,000, but with features similar to a handset costing ₹40,000. Earlier in January, Oppo entered India, close on the heels of another Chinese firm Gionee.

Key market

“India is one of the top markets for handset sector after the US, China and Africa. While these markets are saturated, penetration of smartphones in India is still on the lower side,” said Amit Saxena Director-Marketing at Chinese telecom equipment vendor ZTE Corp.

“The foray has resulted in increasing competition, with now a smartphone available for as low as ₹5,000-8,000. Importantly, this is helping people from small cities and towns to buy these smartphones and use them for both voice and data connectivity,” he said.

According to International Data Corporation, smartphone sales in India are expected to reach 80.57 million units by 2014-end with customers increasingly discarding feature phones for smartphones. India’s smartphone sales rose 186 per cent in quarter ended March 2014, the highest in the Asia-Pacific region. “The smartphone market in India is huge and the new players would be trying to experiment in these markets. About 70-80 per cent of the smartphone market share lies with 5-6 players and the new entrants are looking at capturing some of it,” said Anand Narang, Director–Marketing at Huawei India Consumer Business.

Not intimidated

The rush of Chinese companies has failed to intimidate the established players.

“We are not scared, we welcome competition,” Narang said, echoing Huawei’s, which is the world’s third-largest smartphone manufacturer, stance.

For instance Huawei is banking on its “strong R&D capabilities, innovations and long-lasting devices” to improve its ranking in India.

“For the established foreign brands, I don’t think these new companies would post any threat, while the Indian companies would reap the benefits of having pan-India after sales network,” said Ajjay Agarwal, Chairman and Managing Director at Maxx Mobile.

“The entrance of the new players is also upping the ante in the price game, which might not go on forever as it would hit the bottom sooner or later,” said Rakesh Deshmukh, chief executive officer and co–founder at Firstouch.

Further, Indian handset-makers are looking at introducing software and keyboards in vernacular languages, which would help users in rural areas to use smartphones, Deshmukh added.

With smartphone makers such as Huawei, ZTE, Samsung and Indian companies such as Maxx Mobile and Firstouch gearing up to launch new models, the battle for handset market is just hotting up.

Published on July 15, 2014

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