Overview of The Handset Market in India

Overview of the Handset
Market in India
P Supreet Kumar
Ritu Chaturvedi
Sulabh Arya
February 22, 2010
CONFIDENTIAL AND PROPRIETARY

Any use of this material without specific permission of McKinsey & Company is strictly prohibited
Executive summary
▪ The mobile services market continues to grow in India. The market is expected to grow at ~13% per
annum in the next 4 years (~851 mn in 2013, up from 525 mn in 2009). Further penetration into the
rural markets and the provision of next-gen data services create new avenues of growth for the
mobile operators. This in turn provides an impetus to the overall handset market in India, creating
demand for both new as well as replacement handsets. The handset market is expected to grow
~1.5x times in value in next 4 years (~$9 bn in 2013, up from ~$ 6 bn in 2009).
Working Draft - Last Modified 2/22/2010 11:09:58 AM Printed 2/22/2010 11:10:26 AM

▪ Five key factors drive the handset market in India: Lowering of handset prices; increasing uptake of
DC&S; Increasing participation and aggressive strategy of local vendors; strengthening and
customizing of distribution channels; and multi-SIM phenomenon gaining traction in India.
▪ Nokia continues to lead the market in terms of both volume and value with >50% share in both.
However, the threat from other established global players and newer domestic vendors is
increasing.
– Nokia is facing competition at two levels – market is getting increasingly crowded with entry of
multiple domestic vendors; and global players like Sony Ericsson and Samsung have sharpened
focus on India.
– Nokia has traditionally provided the widest portfolio of handsets. Samsung and Sony Ericsson
have slowly bridged the gap by aggressively launching new products in the last few quarters
– Nokia is exploring additional revenue streams via customized content offerings for India.
▪ Established players are strongly positioned to lead the handset market. New entrants to the market
have a daunting task ahead.
McKinsey & Company | 1

Industry Overview
Indian Mobile services market will continue to grow, albeit at a slower pace
Mobile Service Market In India
Total Subscribers
Million

+13% p.a.
+50% p.a. 799 851
722
629
525
347
234
2007 08 09 10 11 12 2013
Net Adds 84 113 178 125 93 77 52

Mn
Penetration 21 30 43 53 60 65 69
%
Current reported penetration is 33%.. There is enough steam left and expect Operators continue to demonstrate
expect this to rise to 57% by FY12, largely the subs base to reach 654 mn by strong momentum in monthly subscriber
driven by rural customers…. Net adds in FY12E from 386 mn currently… by 2012 additions… expect Indian wireless
India of 13.6 mn in Feb was well ahead of the Indian market would be ~52% operators to reach 800m subs by Mar
China’s 9-10 mn and Indonesia’s 2-3 mn penetrated 2012, implying 66% SIM penetration
- Nomura Singapore Ltd. , Apr 2009 - ICICIDirect.com, June 2009 - Macquarie Research, Sept 2009
SOURCE: Pyramid Research; Analyst Reports; Team Analysis McKinsey & Company | 2
Industry Overview Basic Phones
Growing subscriber base will expand the handset market to Enhanced Phones
Smart Phones - Entry-Level
~ 1.5x, from $6 Bn in 2009 to $9 Bn in 2013
Smart Phones - Feature
Drivers of Growth Handset Market Size
Lowering of prices
1 ▪ Handset Prices have fallen by ~9% YoY between 2007 and
Handset Shipments (Millions, Percent)
2009

▪ Basic handset Price has decreased by 23%; Smartphones by
8-9% YoY between 2007 and 2009 100% = 99 124 119 129 140 153 168
Increasing uptake of Digital Content & Services
2 ▪ Upcoming auction of 3G services will fuel the uptake of next-
generation data services 78 76 72
88 86 83 81
▪ Operators like Airtel and Aircel are launching app stores to
increase the focus of content and services
Increasing participation and aggressive strategy of local 14 15

3 vendors 13 2 14 15
2 9 3
3 7
8
2 2 3 3 3 4 4 6 6
▪ Currently, there are atleast 20 domestic vendors in the market,
accounting for ~15% market share. Pure plays, alongwith 2007 08 09 10 11 12 2013
established retailers, distributors, CE vendors have entered the
market
▪ Domestic brands differentiate on price and features (providing
Handset Revenue (USD Billions, Percent)
feature rich phones at an affordable price range of 2-5k)
Strengthening and customizing of distribution channels 100% = 7 8 6 7 7 8 9

4 ▪ Established vendors are partnering with rural-specific retail
40 37 33 29
channels (Samsung/IFFCO, Nokia/ITC e-Choupal) 55 46
▪ Apple is moving to the industry-accepted national distributor 62
28 26
model 31
30 32
12 18 18
Multi-SIM phenomenon gaining traction 13 17
5 8 11
▪ High tele-density in urban markets and competitive tariffs is 11
18
9
20 22 27
driving demand for dual-sim phones 15 15 17
▪ Dual-sim phones ~ 15% of the market (up from 3% last year) 2007 08 09 10 11 12 2013
SOURCE: Gartner, Voice and Data McKinsey & Company | 3

Industry Overview
1 Price of mobile handsets will continue to reduce over time
Handset ASPs
USD
-23% p.a.
-6% p.a.
Basic Phones 48 40 28 26 25 23 22

2007 2008 2009 2010 2011 2012 2013
-4% p.a. -6% p.a.
Enhanced 130 126 121 118 113 102 96

Phones
2007 2008 2009 2010 2011 2012 2013
-8% p.a. -11% p.a.

Smartphones - 245 227 209 199 171 153 130
Entry
2007 2008 2009 2010 2011 2012 2013
-9% p.a.
-8% p.a.
437 408 359 345
Smartphones - 313 280 257
Feature
2007 2008 2009 2010 2011 2012 2013
SOURCE: Gartner McKinsey & Company | 4

Industry Overview
2 Increasing popularity of VAS will drive growth of feature-rich handsets
Mobile Service Revenue
USD Billion, Percent ▪ Availability of 3G
100% = 18 24 26 33 36 39 43 and WiMAX
services will boost
92 91 91 89 87 85 82 mobile data
Voice revenue
services in India

Data revenue 15 18
13
8 9 9 11
▪ Subscribers in
2007 2008 2009 2010 2011 2012 2013 urban India will use
phones to access
Mobile Data Service Revenue
multimedia services
USD Billion, Percent like video streaming
100% = 1 2 2 4 5 6 8
and video-on-
57 52 48 45 43 41 demand
Messaging 66
48 52 55 57 59 ▪ In rural areas and

34 43
Non-Messaging smaller towns,
utility-type mobile
2007 2008 2009 2010 2011 2012 2013
VAS including
Non-Messaging Data Service Revenue mobile payments
and banking, mobile
USD Biliion, Percent
100% = 0 1 1 2 3 3 4 healthcare and e-
Ringtones learning will see
49
Data Cards/Modems 56 58 58 57 54 52 strong uptake
Browsing/WAP
19 16 16 18 20 22 24
Games
15 16 15 13 12 12 12
Others1 7 7 8 8 8 9 9
3 3 4 4 4 5 5
2007 2008 2009 2010 2011 2012 2013
1 Includes graphics/images, video and music
SOURCE: Pyramid Research McKinsey & Company | 5

Industry Overview
3 New domestic players are aggressively targeting the lower end of
consumer market
Category
▪ 29 handset models ▪ 20 handset models ▪ 5 handset models ▪ 5 handset models
Product ▪ Price range (Rs.) – ▪ Price range (Rs.) – ▪ Price range (Rs.) – ▪ Price range (Rs.) –
Portfolio 2,499 to 7,499 1,749 to 13,249 1,750 to 5,500 2,599 to 3,750
▪ ~80% of districts in ▪ Strategy of “sell deep ▪ High-end handsets for ▪ 600 distributors

Distribution India to sell more” with more urban market sold in ▪ 40,000 retailers
▪ 50,000 outlet network penetration in rural top 5,000 shops ▪ 400 exclusive shops
areas followed by
urban cities
▪ Intend to tie-up with
large retail chains and
major carriers
After sales
▪ > 350 services centers ▪ ~400 service centers in ▪ Multi vendor service ▪ No details available
across country (incl. 250 cities network (>1 vendor per
service 150 dedicated ▪ Toll free complaint city)
company centers) registration, onsite
service (select cities)
▪ 7-10% share of ▪ Turnover of Rs 1,500 ▪ Sales volume of >1.5 ▪ 10% mobile share by
Growth multimedia segment by cr (FY 2010), and Rs mn (FY 2011) 2010
Plans 2011 3,000 cr (FY 2011) ▪ Enhance product ▪ Invest Rs. 100 cr. in FY
▪ Expand in neighboring ▪ Expand retail reach to lineup (~25 models to 2010
markets like Nepal, Sri >70, 000 stores and launched in 2010)
Lanka and Middle East launch exclusive stores ▪ Adopt a direct retail
region ▪ Expand service centers model for distribution
▪ Invest of ~$ 5 mn in to 700 by end of 2010
product dev., marketing
and sales
Other domestic players include – Lemon mobile, Videocon, Onida, Usha Lexus etc.
SOURCE: Voice & Data, Vendor Website, Press Search McKinsey & Company | 6
Industry Overview
4 Handset vendors are adopting innovative distribution channels and
providing customized offering to penetrate rural market
▪ IFFCO - Indian Farmers Fertilizer Co- ▪ ITC e-choupal - an initiative of ITC Ltd.
Partner operative Limited, is a cooperative to link directly with rural farmers for

Background society for farmers procurement of agricultural produce
▪ ~40,000 cooperatives as members ▪ ~6,500 centres spread across 40,000
spread across the country villages in 10 states
▪ Launched in 2008 throughout country ▪ Launched in 2009 in 4 states - Uttar

Partnership ▪ Leverage IFFCO’s distribution network Pradesh, Madhya Pradesh,
Details to market handsets in rural regions Maharashtra and Rajasthan
▪ Offer customized handsets relevant to ▪ Leverage ITC e-choupal’s distribution
the rural user, including features like – network to offer content specific to
– Easy access to commodity prices agriculture
and agricultural information ▪ Content distributed through the network
– Indian calendar of village internet kiosks (managed by
– Facility to use both Hindi and farmers – called sanchalaks)
English for messaging
SOURCE: Press McKinsey & Company | 7

Industry Overview
5 Multi-SIM phenomenon is gaining traction
Drivers for Multi-SIM Current Status of multi-SIM phenomenon
▪ Tariff benefits Penetration of multi-SIM usage in urban mobile users

accruing from on-net %
lower tariffs
100% = 154 mn1 Multiple vendors
▪ Roaming benefits Multi-SIM users by Multi-SIM users by are providing multi-

from using different number of SIMs age group SIM handsets:
SIMs in different % % ▪ Spice was the
circles while travelling Multi- first vendor to
SIM 37 >3 46-55 > 55
(especially in rural introduce dual-
areas with poor
users 10 10 4 25-35 SIM phone
3 13-18 33
11
coverage) 20 ▪ Dual or even
triple SIM feature
70 19
▪ Rise of high income 36-45 23 is a key
2
classes: More people functionality
19-24
are coming into provided by
higher SEC levels domestic
Multi-SIM users by Multi-SIM users by
who posses more vendors
socio-economic monthly family
than 1 connection as
income (Rs. 000)
▪ Even
Single classification
a status symbol established
SIM 63 % %
users
vendors like
E >40
▪ Distinction between
25-40
Nokia are
12 C 9
private and official 9 < 6.25 rumored to soon
D 31 33
life: Users tend to 13 launch dual-SIM
maintain multiple phone
12.5-25 21
connections, separate 18
A 26 28
for personal and
official purposes B 6.25-12.5
Urban
mobile
users
1 As per a survey conducted by JuxtConsult for urban India in 2009 with a sample set of 285,000 users
SOURCE: Press; Vendor Websites McKinsey & Company | 8

Competitive Position of Players
Nokia continues to be a market leader
Vendor Strategy Vendor Market Share
▪ Focus on services business to drive

handset sales Market Share by Volume (Millions, Percent)
▪ Partnering with micro finance
organizations 100% = 21 31 69 99 124
▪ Product and advertising approach tailored

to customer segments
46 49 47
59 56
▪ To go slow on the India strategy
▪ Reduced ad spend and headcount in
16 16
7
marketing and comm. division 6 10
12 6
▪ Restructuring distribution network 13 6 8 2 7
10 12 14 4
3 5 3 4 26
▪ Increased focus on marketing and Others 11 10 12 21
distribution (addl. shops to expand reach)
▪ Plans to launch 32 models across price 2004 05 06 07 2008
points (focus on touch screen phones)
▪ Leverages strong distribution network; Market Share by Value (USD Billions, Percent)
Offers higher margins to retailers than rivals
▪ Bundles extra features in handset than 100% = 2 4 8 7 8
rivals at particular price point
▪ Focusing on touch screen handsets
(ranging over a wide price range) 55 55 54 62 64
▪ Continue to focus on smart phones and

high end multimedia category to boost the 12 18 11
6 6 4
handset sales 10 11 6 10
9 7 5 3
▪ Expanding retail outlets to reach untapped 3
4 4 6 13 6
markets Others 11 12 12 7 12
▪ Re-branding to align with global company
2004 05 06 07 2008
SOURCE: IDC, Gartner, Voice and Data McKinsey & Company | 9

AS OF OCT 2009
Sony Ericsson and Samsung now match Nokia in diversity
and size of portfolio x No. of models
Leader
GSM Product Portfolio at CompareIndia.com Laggard
Price band Motorola Nokia LG Samsung Sony-Ericsson
A1600 N97 GC900 Viewty Jet S8000 XPERIA X1

Smart

> INR 15,000
4 23 7 14 21
RAZR2 V8 5300 XpressMusic KF510 Corby (S3653) Cyber-shot C510
INR 5,000 –
INR 15,000
9 25 13 24 27
W388 1200 KP107 B Guru E2120 W200i
INR 1,000 –
INR 5,000
7 16 12 23 9
Available models 20 64 32 61 57
SOURCE: www.compareindia.com McKinsey & Company | 10

Nokia has moved to yet another level of customization – providing
customized content offerings via a customized channel for India
Nokia Life tools Nokia’s India specific Ovi Services
▪ Launched in June 2009 via the Nokia 2323 and 2330 ▪ Focus on three things popular amongst Indians –
classic devices. Bollywood, Cricket and Astrology.
▪ Concept is to deliver valuable and up-to-date information ▪ Tied-up with Indian companies like Infomedia India, South

on the core topics of agriculture and education, providing India Music Companies Association and other music
rural communities without access to the internet, with labels for providing these services
timely information via SMS at low cost.
▪ Agriculture tool is a big boon for the farmers that has been KrishCricket and Bookmyshow applications available via Nokia Ovi
designed to deliver precise commodity prices from a
network of 291 local market yards.
▪ Available as two plans – Basic (Rs.30/month) and
Premium (Rs. 60/month)
▪ Life Tools services in 10-12 handsets by December 2009
Nokia Life Tools Agriculture, Education and Entertainment services
Nokia ‘Mobile
Nokia’s Direct Content Kiosks
to Consumer Initiatives
▪ Joint venture with HCL Infosystems to sell mobile value

added services and entertainment content directly to
consumers.
SOURCE: IDC, Voice and Data McKinsey & Company | 11

Future Outlook
Mobile Operators and Established Handset Vendors are strongly
positioned to minimize the threat from domestic vendors Low
Medium
High
Product Retail Consumer Marketing Brand

Category Example Capability Reach Ownership Capability Strength

Retailers
Domestic vendors
invest heavily on
establishing:
Distributors
▪ Robust supply
chain
Consumer ▪ Wide retail
Electronics distribution
Player
channel
▪ Brand visibility
Established
Handset
Vendors
Mobile
Operators
SOURCE: McKinsey Analysis McKinsey & Company | 12

Future Outlook
5 Key questions that will shape the future development of industry
How would vendors innovatively lower the prices for 3G handsets to enable
1 uptake?

Would established global vendors be confined to the high-end market while
2 the domestic players fill the low to mid-end space?
How would the market dynamics in India change with the launch of Google’s
3 Nexus One?
What role would the handset vendors play in the new app store phenomenon
4 hitting the Indian market? Or would this be left for operators to shape?
As handset vendors further penetrate the rural market, what role would the
5 organised retailers play?
SOURCE: McKinsey Analysis McKinsey & Company | 13

Appendix: Player Strategies
Player Strategies
Nokia - Looking to adopt a solutions centric strategy
Nokia’s India Strategy
Description
Focus on non- ▪ Introduced Services and Software business

voice divisions
solutions ▪ Launched a series of services like the Ovi App
store, location based and gaming services
▪ Intends to go in for collaborations and strategic

tie ups with service providers and engage
customers in creating and using content
▪ Introduced nine concept stores to offer a
complete portfolio of Nokia mobile devices,
enhancements and services to its customers
Focus on ▪ Tied-up with organizations to start micro-

increasing financing schemes in 12 States, covering
rural sales major rural markets
▪ The scheme allows purchasers to pay in
installments
Unique ▪ Has segmented customers into 12 different

customer types on the basis of the mobile experience
segmentation they are looking for
▪ Provides four different categories of products
to cater to these segments – Live (lifestyle –
Xpress music) , Achieve (E series), Connect
(simplicity) and Explore ( superior technology – “Nokia would focus on non-voice "Nokia’s retail intent is to provide
N series) solutions. "Connecting people to a consistent, world class
what matters and empowering experience to consumers and
▪ Different advertising strategies to suit its them to make the most of every reinforce their trust in the Nokia
Targeted different product categories guided by the moment will be our vision brand…our intent is to offer
advertising Flow, Wow and Show aspects of a phone and ” – Nokia India MD and VP consumers irresistible solutions
strategy the target audience. through concept stores“
▪ Using Shah Rukh Khan as the brand - Nokia India Director (Retail)
ambassador who has a pan-India appeal and a
huge connect in smaller markets
SOURCE: Factiva McKinsey & Company | 15

Player Strategies
Samsung – Introduced a diverse portfolio of handsets to
cater to different customer segments
Samsung’s India Strategy
Description
Providing the
▪ Samsung’s strategy is to bundle more features
than rivals at specific price points
right features
– Entry level ‘Guru’ comes with features like

for specific
Hindu calendar, solar recharge facility, etc
segments
– Dual SIM handsets for small businessmen
and durable ‘Marine’ for adventure seekers
– Targeting the youth with attractive, feature
rich models (preloaded social networking
sites) like the ‘Corby’
Focus on ▪ Providing touch-screen phones over a wide

touch-screen price range from Rs. 7,600 up to Rs. 33,900 to
phones cater to diverse customer preferences
▪ One-third of all launches are in the touch-
screen category
Incentives to ▪ Offer higher margins (of the order of 30%) to

retailers and retailers of multi-brand outlets than its rivals
stronger ▪ Reaches about half of the 120,000 handset
distribution dealers and has Samsung agents present in
network most of the big retail shops to sell its handsets.
▪ Reward schemes for dealers and specific ‘’We want to relevant to "The OMH (Open Market
teams to look into retailer relationship customers…This business is all Handsets) market is expected to
management about to change. The go-to-market reach 30% in 2010…with this
time is extremely important growth we expect the market size
Unlocked ▪ Introduced the Mpower series of handsets - Ranjit Yadav, Director (Mobile of CDMA mobile phones to
phones for the which could be used for all CDMA services and IT) expand in future,“
revived CDMA ▪ Increase in the retail reach in the CDMA - Hendrick Lee, VP HHP Division
market handset market from 3500 to 10000 retailers
▪ Plans to expand its CDMA handset portfolio to
15 models for various segments
Source: Press, Company Website McKinsey & Company | 16

Player Strategies
LG – Investing to catch up in the Indian GSM market
LG’s India Strategy

Description
Expanded
▪ Plan to launch 32 new models across all price
points including 3G enabled handsets, touch

handset
screens and entry level phones
portfolio
▪ Plans to increase its production capacity in the
manufacturing plant at Pune
Focus on ▪ Expand its touch screen product portfolio to 10

touch screen models and target 10% market share in the
phones segment
▪ Advertising strategy primarily focused on high
end touch screen phones talking about the
latest technology
Expanding the ▪ Deploying 1,000 additional shop sales

retail reach executives
▪ Expanding the channel coverage by launching
about 1,000 additional shop-in-shop formats in
rural and tier II cities
LG is rapidly gaining market

▪ Plans to double its investment this year and "We would be doing India-
Future share in the GSM market,
invest Rs 400 crore on advertising specific product planning and the
Investment despite being a late entrant. I
▪ Additionally, invest Rs 200 crore in R&D to design, color and finishing would
plans believe our distribution line was
study market dynamics and consumer also depend on the choice of
poor earlier, but now we are
behavior Indian customers.“
reworking our strategy here.
▪ Looking at increasing headcount in sales Bo H Choi, Head (APac), Mobile
Moon B Shin, MD LG Mobile
vertical to enhance presence.

Player Strategies
Sony Ericsson - Company is committed to the Indian market
Sony Ericsson’s Future Strategy
Description
Continued
▪ Focus on integrating the communication and
entertainment needs with the launch of three
focus on high-
new handsets like Aino, Satio and Yari.
end
multimedia
▪ Introduction of unique features like 12.1 Mp
camera, gesture controlled actions, motion

phones
sensor technology etc.
▪ Launched a gaming handset ‘F305’ is a aimed
to tap the growing Indian gamer base.
Expansion to ▪ Plans to increase the number of exclusive

tap untapped outlets from 65 in 2008 to 200 by 2010.
market ▪ Plans to penetrate into circles B and C.
▪ With the establishment of the Product

Development Centre in June 2008, SE plans to
Customized tap young engineers to create India specific
offerings products.
▪ Launched its Developers World program in
India to engage third party mobile developers
to design content and applications
“We put special emphasis on Indian customers are evolving
India and are committed to and their enchantment for smart
▪ Adopting a new brand message ‘make.believe’ further investment and phones represents the trend.
Rebranding to to emphasize the fusion of communication and
align with the expansion in this country as we Sophisticated smart phones are
entertainment. strengthen our market not just a style statement but
company ▪ Seven new colors and liquid energy added to presence. India is one of the also help to keep in touch with
transformation the liquid identity logo three most important markets for business and entertainment
▪ Global campaign to focus on India as one of us.” – SE President needs – SE GM, India
the key regions
SOURCE: Sony Ericsson, Voice and Data, Press McKinsey & Company | 18
Player Strategies
Motorola – Going slow on India Strategy due to economic
downturn and falling market shares
Motorola’s India Strategy
Description
▪ Motorola plans to go slow on its India strategy

Dwindling due to
market share – Economic downturn

– Falling market share
▪ Down from second position in 2006 (10%), to
fourth position in the market
Considering
▪ Motorola’s handset business has been under
pressure globally and management may
selling off
consider selling off the unit globally.
handset Unit
▪ Videocon group, among many, is interested to
buy the unit
▪ Motorola has a limited product portfolio
Limited ▪ Even in 2009 only a handful of models
handset launched
launches ▪ Usually late to the market for any new feature
or technology. For eg, Motorola entered slider
phone market in 2007, when market well under
control of Nokia, Samsung
Restructured ▪ Terminated contract with Bharti Teletech “Product Portfolio issue has ‘A number of companies have
sales & distribn ▪ Roped in fresh distributor – Jaina Marketing & been characteristic of Motorola. expressed interest in acquiring
network Appliances It has not taken into account the Motorola’s handset business,
booming market and diverse including India’s Videocon.
Reducing ▪ Considerably reduced Advertising needs of the customer." - However the sale will happen at
Advertising ▪ Laying off its executives in the marketing and Mahesh Uppal, Director Comfirst the right valuation’’ – Company
spend communication division. official
– 400 employees by Dec 2008
– 100 more employees by Dec 2009

Appendix
Story of Apple I-Phone in India
IPhone launched in August 2008 Airtel sold ~20,000 phones in first 3 quarters*
▪ Exclusive agreement with Airtel/Vodafone Key Reasons For Failure

▪ Launch supported by ATL and BTL effort
– Pre-launch registration of interest ▪ Launched at a high price
– Mega launch event at midnight High Price ▪ No subsidy/discount offered by Airtel or

▪ Device offered at ~$700 / ~Rs 30,000 Vodafone (unlike operators in US and
▪ Operators introduced iPhone-specific data Europe)
plans (aimed at promoting net-surfing on Apple is
their networks) ▪ Nokia dominates the market, with 70% redesigning the
Competition share of total market and 40% share in
– Vodafone - 250 MB/600 MB per month distribution strategy
from Nokia
(Rs 799/999 per month) Smartphone segment ▪ Talking to
– Airtel - 500 MB/month (Rs 600/month) National
▪ Distribution via operator-owned shops Absence of ▪ Initial model didn’t allow users to forward distributors in
text messages (~70% of mobile users India for
features imp
forward messages at least once a day) channel
for India
partnership
▪ Trying to imitate
No push from ▪ Limited effort from Airtel and Vodafone to
the successful
market the iPhone, beyond creating the
Partners approach
initial buzz
followed by
▪ Operators focused on leveraging Apple’s
Nokia/HCL and
and iphone’s brand rather than focus on
RIM/Redington
selling more handsets
Lag between ▪ India launch was >1yr post the global

global and launch
India launch ▪ Large section of early adopters already
procured the handset via friends/family,
travel abroad or the grey market
* Vodafone sold even lesser units

SOURCE: Team Analysis; Press
End of Document

Overview of The Handset Market in India

Загружено:

Сведения о документе

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Overview of The Handset Market in India

Загружено:

Авторское право:

Доступные форматы

Overview of the Handset

February 22, 2010

CONFIDENTIAL AND PROPRIETARY

Working Draft - Last Modified 2/22/2010 11:09:58 AM Printed 2/22/2010 11:10:26 AM

McKinsey & Company | 1

Mobile Service Market In India

Working Draft - Last Modified 2/22/2010 11:09:58 AM Printed 2/22/2010 11:10:26 AM

Net Adds 84 113 178 125 93 77 52

Drivers of Growth Handset Market Size

Working Draft - Last Modified 2/22/2010 11:09:58 AM Printed 2/22/2010 11:10:26 AM

Increasing participation and aggressive strategy of local 14 15

Strengthening and customizing of distribution channels 100% = 7 8 6 7 7 8 9

SOURCE: Gartner, Voice and Data McKinsey & Company | 3

Working Draft - Last Modified 2/22/2010 11:09:58 AM Printed 2/22/2010 11:10:26 AM

-4% p.a. -6% p.a.

Enhanced 130 126 121 118 113 102 96

2007 2008 2009 2010 2011 2012 2013

-8% p.a. -11% p.a.

2007 2008 2009 2010 2011 2012 2013

2007 2008 2009 2010 2011 2012 2013

SOURCE: Gartner McKinsey & Company | 4

Working Draft - Last Modified 2/22/2010 11:09:58 AM Printed 2/22/2010 11:10:26 AM

48 52 55 57 59 ▪ In rural areas and

2007 2008 2009 2010 2011 2012 2013

1 Includes graphics/images, video and music

SOURCE: Pyramid Research McKinsey & Company | 5

Working Draft - Last Modified 2/22/2010 11:09:58 AM Printed 2/22/2010 11:10:26 AM

Working Draft - Last Modified 2/22/2010 11:09:58 AM Printed 2/22/2010 11:10:26 AM

▪ Launched in 2008 throughout country ▪ Launched in 2009 in 4 states - Uttar

SOURCE: Press McKinsey & Company | 7

Drivers for Multi-SIM Current Status of multi-SIM phenomenon

▪ Tariff benefits Penetration of multi-SIM usage in urban mobile users

Working Draft - Last Modified 2/22/2010 11:09:58 AM Printed 2/22/2010 11:10:26 AM

SOURCE: Press; Vendor Websites McKinsey & Company | 8

▪ Focus on services business to drive

Working Draft - Last Modified 2/22/2010 11:09:58 AM Printed 2/22/2010 11:10:26 AM

▪ Continue to focus on smart phones and

SOURCE: IDC, Gartner, Voice and Data McKinsey & Company | 9

Price band Motorola Nokia LG Samsung Sony-Ericsson

A1600 N97 GC900 Viewty Jet S8000 XPERIA X1

Working Draft - Last Modified 2/22/2010 11:09:58 AM Printed 2/22/2010 11:10:26 AM

SOURCE: www.compareindia.com McKinsey & Company | 10

Nokia Life tools Nokia’s India specific Ovi Services

Working Draft - Last Modified 2/22/2010 11:09:58 AM Printed 2/22/2010 11:10:26 AM

Nokia Life Tools Agriculture, Education and Entertainment services

▪ Joint venture with HCL Infosystems to sell mobile value

SOURCE: IDC, Voice and Data McKinsey & Company | 11

Product Retail Consumer Marketing Brand

Working Draft - Last Modified 2/22/2010 11:09:58 AM Printed 2/22/2010 11:10:26 AM

SOURCE: McKinsey Analysis McKinsey & Company | 12

Working Draft - Last Modified 2/22/2010 11:09:58 AM Printed 2/22/2010 11:10:26 AM

SOURCE: McKinsey Analysis McKinsey & Company | 13

Focus on non- ▪ Introduced Services and Software business

Working Draft - Last Modified 2/22/2010 11:09:58 AM Printed 2/22/2010 11:10:26 AM

Focus on ▪ Tied-up with organizations to start micro-

Unique ▪ Has segmented customers into 12 different

SOURCE: Factiva McKinsey & Company | 15

Working Draft - Last Modified 2/22/2010 11:09:58 AM Printed 2/22/2010 11:10:26 AM

Focus on ▪ Providing touch-screen phones over a wide

Incentives to ▪ Offer higher margins (of the order of 30%) to

Source: Press, Company Website McKinsey & Company | 16

LG’s India Strategy

Working Draft - Last Modified 2/22/2010 11:09:58 AM Printed 2/22/2010 11:10:26 AM