1

A smartphone is a mobile phone with highly advanced features. A typical smartphone

has a high-resolution touch screen display, WiFi connectivity, Web browsing
capabilities, and the ability to accept sophisticated applications. The majority of these
devices run on any of these popular mobile operating systems: Android, Symbian,
iOS, BlackBerry OS and Windows Mobile.

A smartphone is expected to have a more powerful CPU, more storage space, more
RAM, greater connectivity options and larger screen than a regular cell phone. High-
end smartphones now run on processors with high processing speeds coupled with
low power consumptions. That means, they’ll allow you to play 3D games, browse the
Web, update your Facebook account, call, and text much longer than you used to.

In addition to the features mentioned earlier, smartphones are also equipped with
innovative sensors like accelerometers or even gyroscopes. Accelerometers are
responsible for displaying screens in portrait and landscape mode, while gyroscopes
make it possible for games to support motion-based navigation. The earliest touch
screen smartphones used resistive touchscreen displays, which required the use of
slender pointing objects known as styli (or stylus in singular form). Most of the later
models however, like the iPhone and most Android phones, employ capacitive
displays, which feature multi-touch finger gestures. The first Symbian phone, the
touchscreen Ericsson R380 Smartphone, was released in 2000, and was the first
device marketed as a "smartphone". It combined a PDA with a mobile phone.
 2

Over the past years, smartphones have changed the way we live our lives. From
checking the weather to running a business, we often rely on these small powerful
devices to complete our daily tasks with ease. Since their first introduction,
smartphones have consistently evolved to meet our growing needs in the form of
faster wireless connections, sharper images, and greater memory storage, just to name
a few. Today, we salute the ever-changing smartphone and feature highlights to
understand its transformation to this day.

In 1994: IBM Simon was the first smartphone which came into existence in the year
1994. IT is the First smartphone to feature a MONOCHROME LCD Touchscreen. It
was designed and engineered by International Business Machines Corp. and
assembled under contract by Mitsubishi Electric Corp.

In 1996: NOKIA 9000 communication entered the not-yet-developed smartphone

space in 1996. It had a full Qwerty keyboard and physical navigation buttons flanking
a much larger display.

In 1999: Blackberry 850 a two-way pager with a limited HTML browsing and
supporting email. It also had an LCD screen and a 4 MB RAM.
 3

In 2000: The Ericson R380 had a large display and a flip cover with keys. Thick,
wide, long and not the most appealing look. Also, it had a strange antenna.

In 2003: Blackberry Quark, first model to feature a speakerphone. The Quark’s web
browsing features and thumb ready keyboard helped redefine phones as DATA-
Churning computers.
 4

In 2007: The 1st Generation IPHONE brought as a technological revolution in the

smartphone arena. With Ground breaking features like Corning Gorilla Glass
protection and Internal Memory. It had its own OS called IOS.

In 2008: HTC Dream, This phone was first (AKA T-MOBILE G1) Released in
September 2008 and used the Linux-based Android operating system. Features
included Wi-Fi, Camera, Bluetooth, SMS, Loudspeaker.

In 2010: Samsung Galaxy S Android produced in over two dozen variations. At the
time of its release, IT included the fastest graphical processing unit and was the
thinnest smartphone. Other featured included Wi-Fi, camera, bluetooth, FM Radio.
 5

In 2012: The Nexus 4 is a smartphone Co-Developed by Google and LG Electronics.

IT is the fourth smartphone in the Google Nexus product family, unveiled on October
29, 2012, and released on November 13, 2012.

In 2013: Apple IPHONE 5S launched in September 2013, this phone is a single SIM
that accepts A Nano-SIM. Connectivity Options include Wi-Fi, GPS. This phone
became a huge hit and a favourite among the consumers after its release.
 6

In 2016: IPHONE 6 Plus slight upgrade over the previous IPHONE version. The
IPHONE 6 Plus is packed with amazing features such as A 12 MP Camera. A faster
processor and a longer battery capacity of up to 6 days on standby.

In 2017: The focus has shifted towards screen size as many of the flagship devices
have an 18:9 full view display and are accompanied by dual cameras on the back.

In 2018: It is too early to say anything about this year but the big change that we are
seeing is the premium styling and 18:9 aspect ratio coming in mid-range devices. Best
example would be Honor 9 Lite.
 7

As the Indian cellular market goes through consolidation and aggressive 4G roll out,
demand for smartphones will continue to grow. Smartphones in India are expected to
account for 62% of all mobile phones sales in India in 2018. India is an attractive
market for the manufacturers. Mobile manufacturing in India has crossed 100 million
units mark and will cross 500 million mark within next two years. Credit of this
manufacturing boost largely goes to “Make in India” plan propelled by Narendra
Modi government. Earlier, there were only international companies such as Samsung,
Nokia, LG, etc., who were producing mobile phones in India. However, in the last one
year, India has attracted 37 new mobile manufacturing companies, giving a much-
needed fillip to domestic production.

Xiaomi and Samsung are jointly the top smartphone brands in India, according to
International Data Corporation latest report. The latest Quarterly Mobile Phone
Tracker by IDC for Q3 2017 reveals that Xiaomi along with Samsung captured 23.5%
market share in the last quarter. Xiaomi almost tripled its shipments year-on-year and
doubled quarter-on-quarter in last quarter. IDC adds that Xiaomi focus on the
traditional channel for marketing its products has been a key strategy. The market
research firm added Samsung had a "record breaking quarter" where it registered 39%
sequential growth quarter-on-quarter and 23% year-on-year.
 8

According to the IDC report, some of Samsung's bestselling models were the
Samsung Galaxy J2, Samsung Galaxy J7 Nxt, and Samsung Galaxy J7 Max that
contributed to almost 60% of the volume for the company.

Talking about top Xiaomi products, the Redmi Note 4 was the best-selling smartphone
in India again as the company shipped roughly 4 million units in this quarter. IDC
pointed out that Xiaomi's aggressive approach for pricing its smartphones made it a
clear winner in selling devices on e-commerce retailers and direct Internet platform.
The company's offline expansion through preferred partner program and Mi stores has
been also getting a good response as its shipments doubled from the last quarter.
Xiaomi recently announced that it shipped 9.2 million smartphones, a record number
of units, in India in Q3 2017.

Lenovo (including Moto) made its comeback as the third smartphone brand and saw
an increase of 83% in shipments from the previous quarter. IDC says that recent
launches under Moto brand has reversed internal brand share, and claims that
"Motorola contributes to two-third of its portfolio." Vivo was the fourth top
smartphone brand, and saw a dip in its market share. In terms of shipments, the
Chinese company saw a decline after a record breaking second quarter. According to
IDC, Vivo V7 Plus and Y69 received strong initial traction in the market. At the fifth
position was Oppo which had its biggest sell-in quarter so far in India as vendor
shipments increased by 40% sequentially and 81% from same period last year.

"In the coming few quarters, both Samsung and Xiaomi would need to further
strengthen their channel play and significantly differentiate their products on
technology and quality to sustain and fight for leadership in this hyper competitive
smartphone market," said Upasana Joshi, Senior Analyst, IDC India.

Buoyed by pre-Diwali sales, the smartphone shipments in India reached a record 39

million units in last quarter and saw a substantial growth of 40% from the previous
quarter and a healthy 21% growth from the same period last year. The festival season
in the country also meant that the Indian smartphone shipments accounted for 10% of
 9

the global smartphone shipments for the first time ever in a quarter. Talking about
mobile phone shipments, over 80 million mobile phone shipments were recorded in
the third quarter of 2017.
 10

1. Xiaomi
Xiaomi was founded in 2010 by serial entrepreneur Lei Jun, who believes that high-
quality technology doesn't need to cost a fortune. Xiaomi create remarkable hardware,
software, and internet services for and with the help of our Mi fans. Xiaomi
incorporate their feedback into our product range, which currently includes the Mi
Note Pro, Mi Note, Mi 4, Redmi 2, Mi TV, Mi Band and other accesso- ries. With
more than 61 million handsets sold in 2014, and products launched in Taiwan, Hong
Kong, Singapore, Malaysia, Philippines, India, Indonesia and Brazil, Xiaomi is
expanding its footprint across the world to become a global brand.

The "MI" in the logo stands for “Mobile Internet”. It also has other meanings,
including "Mission Impossible", because Xiaomi faced many challenges that had
seemed impossible to defy in their early days.

Xiaomi's mission statement is to offer affordable smart devices so people can enjoy
the benefits of technology and connectivity at a lower price. Xiaomi has also
been focused on its young, tech-savvy consumers, marketing heavily through social
media and online word-of-mouth.
 11

Xiaomi is facing tough competition in China, with Honor getting majority of the share
followed by Oppo and then by Xiaomi.. In 2014, Xiaomi was the largest smartphone
company in China. Xiaomi has now extended into developing a wide range of
consumer electronics, including a smart home device ecosystem.

As of 2017, Xiaomi is the world fifth largest smartphone company. In India Xiaomi is
the best-selling smartphone brand of 2017 with its Redmi Note 4 being the best-
selling smartphone in India. Let us have a look at Xiaomi’s performance of 2017 in
India.

Xiaomi’s Performance In 2017 (INDIA)

In the last year, Xiaomi’s market share in India has gone from just 6% to 22%,
according to Hong Kong-headquartered market intelligence firm Counterpoint
Research. That puts its share at par with South Korea’s Samsung, a leader for several
years now. And as of September, three of the five most popular smartphones in India
are from Xiaomi, Counterpoint said in a report on Oct. 27.

It’s quite a coup considering Xiaomi entered India only in 2014—Samsung has been
around since 1995. The Beijing-based company has invested around $500 million in
the Indian subcontinent in the last two years according to Bloomberg and intends to
invest a similar amount between the next three and five years.

This stupendous success is because of a strong supply chain and the company’s ability
to sell value for money products in a very price sensitive market. Xiaomi didn’t
respond to an emailed questionnaire from Quartz.

Since its entry into India, Xiaomi has stood out for its unique go-to-market strategy of
selling only via e-commerce. It signed an exclusive partnership with e-tailer Flipkart
and ran flash sales for new model launches, with the sales typically ending within
seconds of opening. For instance, in a flash sale for the Redmi 1S model in September
2014, around 40,000 pieces were sold out in just 4.2 seconds.
 12

This allowed the company to single-mindedly build capabilities around online retail,
which now accounts for around 30% of India’s total smartphone sales. Most other
brands have struggled with juggling online and offline sales, with many often failing
to satisfy either set of customers.

While around half the phones sold online are Xiaomi phones now, according to
Counterpoint Research, the company has, over the past few months, begun pushing
sales through brick-and-mortar stores, too. As a result, Xiaomi’s share of total sales in
India from offline channels has doubled to 20% in the last year. It has also worked on
creating a cult followingin India, a move that analysts say helped create strong
branding at a time when they weren’t even investing much in conventional
advertising.

To increase its offline sales, Xiaomi is opening direct stores called Mi Home, and
partnering with big retail chains like Croma, Univercell, Poorvika, and Sangeetha. In
smaller cities, the company has launched a “Preferred Partner Programme” where it
ties up with multi-brand outlets to put up Xiaomi signage and promote sales of its
models. These preferred partners aren’t exclusive.

Unlike other players that import devices, Xiaomi has set up two manufacturing
facilities in Andhra Pradesh where it manufactures over 75% of the handsets it sells in
India. These units are run in partnership with Taiwanese electronics manufacturer
Foxconn..

It also seems to have played the pricing game just right. Xiaomi’s success so far has
come almost entirely from the mid-price smartphone segment (between Rs10,000
($154) and Rs20,000), among the fastest-growing in India. All its models in the
country fall in that range, or are cheaper, and Xiaomi phones have more features than
its rivals’ products.

As a result, three of the five highest selling smartphones in India between July and
September were made by Xiaomi, according to Counterpoint Research.

The top five smartphone models in India in Q3 2017

 13

1. Xiaomi Redmi Note 4

2. Xiaomi Redmi 4
3. Xiaomi Redmi 4A
4. Samsung Galaxy J2
5. Oppo A37

However, it’s not going to be easy for Xiaomi to hold on to its market share.For one,
its South Korean rival is likely to come out all guns blazing. “Samsung will become
aggressive going forward now,” Singh of IDC said. After all, India is a key market for
Samsung, which has remained a market leader for years now, while Apple is still
making inroads. Between July and September 2017, Samsung maintained its 23%
market share in India, but missed capturing the Rs10,000-15,000 segment where
Xiaomi managed to cater to most of the demand.

There are others, too, including China’s Oppo, Vivo, and Huawei, and Indian firms
Micromax, Lava, and Karbonn Mobiles. In all, Indians today have over150 models of
phones to choose from.

So far, Xiaomi has managed to crack the code, but holding on to its spot at the top of
the Indian smartphone market will be a different challenge.
 14

SWOT Analysis of Xiaomi.

Strengths
One of the Largest Smartphone maker – Xiaomi is one of the largest smartphone
makers in the world. It is said to be the 5th largest smartphone manufacturer as of
2017. Originating from China, the Smartphones are manufactured in huge quantities
and have wide acceptance across the world.

Highest selling Smartphone – The REDMI Note 4 became the highest selling
smartphone in India and China and practically in 50% of the Asian market. This
shows that Xiaomi is strongly rising in the smartphone market and has already beaten
several giants.

Huge China and Asia market available – Another benefit to Xiaomi is that the whole
Asian market is their playground. As China lies within Asia and as Chinese mobile
brands are highly penetrated in the Asian markets, Xiaomi still has a lot of ground to
explore.

Penetrative Pricing – Xiaomi has the strongest penetrative pricing advantage because
it generally uses direct marketing techniques and avoids dealer and distributor
margins.

Good Quality products – Even at such low prices, no one can doubt the quality of
Xiaomi phones. The smartphones are regularly rated high on all E-commerce portals –
a further proof that Xiaomi does not compromise on quality even if lowers the price
regularly.

Manufacturing Advantage – China has a huge manufacturing advantage because the

country in itself is known for manufacturing and exporting the products. China is also
one of the largest consumers in the Asian market.
 15

Rising Brand Awareness – Xiaomi’s brand awareness is rising and more and more
people are getting to know about the brand thereby resulting in higher sales across the
globe.

Growing year on year – The company which started manufacturing in 2011 has grown
by leaps and bounds and is regularly growing year on year.

E-commerce advantage – The Flash sale model is a very popular model which has
worked wonders for Xiaomi. In this model, the product is made available only in
limited quantities and sold at a very low price. This model made the consumers crazy
and each Xiaomi looked like a price which was hard earned.

Specifications of the smartphones produced – Xiaomi smartphones are technologically

advanced as well and they give higher tech specs at lower price. Xiaomi phones are
especially renowned for their camera which is said to be very high resolution and
gives excellent photos.

Research and Development – Xiaomi invests heavily in R&D and it is a market

follower but its major R&D expenses are towards cost advantage and not
differentiation advantage.

Weaknesses
Offline Distribution – Xiaomi mainly sold through the flash sale but at times, it was
difficult for customers to get their hands on a REDMI or MI model phone. This is
because their offline distribution is not upto mark and Xiaomi phones sell mainly via
E-commerce.

Advertising and Marketing spends – The advertising and marketing spends of the
brand is very low. The brand launches ATL campaigns only when coming up with a
new product. However, the advertising is erratic at best and is never consistent.

Brand Image and Equity – Because the advertising and marketing efforts are poor, the
brand image is not so good as Samsung or Apple or other such competitors. The
 16

product portfolio of Xiaomi is also limited which further affects the brand image.
Service centers too are limited and all these factors contribute to the low brand equity
and reputation.

Low Skimming price – While other smartphone manufacturers survive on skimming

price, Xiaomi launches its own phones at low prices in the flash sales. As a result, it
cannot take advantage of the skimming price or the advantage is not as profitable as it
would be for Samsung or Apple or other such high end brands.

Opportunities
Expansion – Covering the developing countries and the emerging markets should be
the priority for Xiaomi. As it mainly follows online sales model, which is becoming
popular in many countries, it should expand to countries where E-commerce mode of
purchase is well established or in the process of establishment.

Distribution – Besides online distribution, Xiaomi also needs to concentrate on offline

distribution if it ever wants to be consistent like some of its top competitors. Offline
distribution would also mean higher expenses and therefore a rise in price. But it will
help the brand to create a long term image and equity.

Brand Building – Brand building methods such as Sales promotions, Trade

promotions, ATL campaigns and BTL campaigns should be launched as regularly as
possible to build a better brand image. Xiaomi is far behind Oppo and Vivo where
BTL Campaigns are concerned.

Product Portfolio – Product portfolio of Xiaomi is limited and it has 2 major series
which actually contribute to the complete revenue of the brand. Expanding the product
portfolio will help the brand in brand building as well as in getting higher revenues.

Product innovations & Differentiation – Being a market follower is tough and Xiaomi
needs to get a step ahead by introducing highly differentiated phones which have
innovative touches to it. Moreover, it needs to advertise these advantages to get more
and more customers to buy their products.
 17

Penetration of Smartphones – Across the world, the smartphone as a product is being

adopted and people are using more and more smartphones with combination of
Internet. This market penetration of Smartphones is for the benefit of Xiaomi. The
better phones they manufacture, the more they will be able to capture market share.

The dying need for expensive smartphones – People are tired of spending money
every year on a Samsung S8 or the latest Apple Iphone. People want cheaper
alternatives so that they can change their phone every alternate year. As a result, most
potential customers who have the potential to buy high end smartphones are also
buying chinese smartphones for their lower prices. This is why majorly all rising
smartphone brands are from China – Xiaomi being one of them. This shift in
consumer preference is to the benefit of Xiaomi

Threats
Competition – Oppo and Vivo are 2 of the biggest competitor for Xiaomi because they
are themselves from China and have the same manufacturing advantages like Xiaomi.
Besides this, Oppo and Vivo have a strong offline presence and have huge distribution
network. Thus, they are a huge threat to Xiaomi.

Service – The lack of service centers equivalent to the number of sales by the brand is
a worrying statistic. Xiaomi needs to increase its sales and service centers both if it
wants to retain its customers.

Brand Differentiation is absent – The smartphone segment has become such that brand
differentiation is becoming very difficult. Each brand is coming up with products
which are almost similar, thereby making it difficult for the customer to choose one
brand over other. This will become especially difficult when more and more brands
come from China.
 18

2. SAMSUNG
Samsung Mobile Division is one of five business units within Samsung Electronics,
belonging to the Samsung Group, and consists of the Mobile Communications
Division, Telecommunication Systems Division, Computer Division, MP3 Business
Team, Mobile Solution Centre and Telecommunication R&D Centre.
Telecommunication Business produces a full spectrum of products from mobiles and
other mobile devices such as MP3 players and laptop computers to telecommunication
network infrastructure. Headquarters is located in Suwon, South Korea.

In 1977 Samsung Electronics launched the Telecommunication Network, and in 1983

it initiated its mobile telecommunications business with the hope that this would
become the company's future growth engine.

Samsung mission statement is “to inspire the world with our innovative
technologies, product and design that enrich people’s lives and contribute to social
prosperity by creating a new future.”

Samsung Philosophy and Goals are:

On the Basis of Human Resources & Technologies

 19

· Make the extension of human resource development and technical superiority with
managementprinciples
· Increase the synergy effect of the whole management system through human
resources and technologies

On the basis of company Inner Goals

·Create the products and services that give customers the best satisfaction

· Retain the 1st position in the world in the same line of business

On the basis of Social Goals

· Contribute for common interests and a rich life

Samsung’s Performance In 2017 (INDIA)

India is one of the most lucrative smartphone markets on the planet and Samsung
continues to enjoy a strong leadership position there. Some of China’s top smartphone
vendors that also sell their products in India actually managed to push out all local
manufacturers from the top five rankings in the final quarter of 2016. Samsung also
shipped fewer smartphones in India during Q4 2016 due to mounting competition
from Chinese rivals, but it held on to the lead.

The latest data from market analysis company Counterpoint Research reveals that
Samsung leads the Indian smartphone market with a 24.1 percent market share.
Samsung also leads the feature phone market with 26.6 percent market share.

It’s the same story in Q2 2017, as well. No local manufacturer is in the top five.
Samsung is followed by Xiaomi, Vivo, Oppo and Lenovo. All four of them are based
in China.

In the third quarter, strong demand for high-performance memory chipsets for
servers and flagship mobile devices was a contributing factor to the company’s
overall robust performance.
 20

The Mobile Business saw smartphone shipments increase on the back of the global
roll-out of the newly launched flagship, Galaxy Note 8, and solid performance of
the new Galaxy J series. However, overall revenue and earnings decreased QoQ due
to the higher sales of mid- to- low tier models.

In the fourth quarter, Xiaomi conquered 25 percent of the market in the fourth
quarter, while Samsung had just 23 percent. Xiaomi's aggressively priced portfolio of
smartphones and its local strategy helped the firm clinch the top position in India,
Tarun Pathak, associate director at Counterpoint, said in the firm's report.

Another reason why Xiaomi was able to topple Samsung was because it allowed its
Indian unit the freedom to run the business locally.
 21

SAMSUNG SWOT ANALYSIS

Strengths
Samsung is the world’s most successful electronics manufacturer. It is the world’s
largest manufacturer of television sets, liquid crystal display (LCD) panels, mobile
phones and smartphones.

Samsung is the world’s number one marketer of mobile phones with 21.4% of the
world’s largest market share in the second quarter of 2015. Apple is number two with
13.9%.

Samsung has impressive research and design capabilities. It was able to create and roll
out Samsung Pay, a payment app with similar capabilities to Apple Pay, in less than a
year. Samsung has been able to replicate many of the capabilities of both Apple Inc.’s
phones and Google Inc.’s Android operating system for mobile devices.

Samsung has strong manufacturing and marketing capabilities.

Samsung has long-standing relationships with retailers in the United States and
Europe that provide a steady sales channel for its products.

Weaknesses
Samsung has not been able to match Apple Inc.’s marketing capabilities for
smartphones. Its share of the U.S. smartphone market fell by 2.3% between 2014 and
2015. In contrast, Apple’s share price grew by 34.9%.

Some Chinese competitors are catching up to Samsung in the smartphone market.

Between 2014 and 2015 Huawei’s share grew by 48.1%, and Xiaomi’s share grew by
29.4%.

Samsung is heavily dependent upon consumer electronics sales in markets with

limited potential for growth, such as the United States and Europe, for much of its
revenue.
 22

Samsung’s devices use the Google Android open source operating system. Many
consumers seem to view Android as an inferior product to Apple’s iOS. The public
has not been as accepting of Android as the tech community has.

Some consumers view Apple products as more advanced and dependable than
Samsung products.

Samsung’s marketing efforts are not as sophisticated as Apple’s.

Opportunities
Growing market for smartphones, tablets and other mobile devices, especially in
developing regions such as Africa and India, where consumers are unfamiliar with
PCs. Sales of tablets finally overtook sales of traditional personal computers in 2015.

Increased demand for tablet and smartphone-based solutions such as Samsung Pay

New technologies such as wearable tech

Growing middle class in developing world will increase market for consumer
electronics.

Growing online market from sales channels such as Amazon.com

Threats:
Apple has emerged as the dominant smartphone and tablet brand in some markets,
such as the United States. Samsung has not been able to overcome Apple’s reputation
for reliability.

Apple’s reputation for quality, reliability and sophistication seems to be growing.

The Google Android operating system, which Galaxy devices depend upon, is not as
popular with average people as iOS is.
 23

Declining or stagnating middle-class incomes in North America and the United States
could reduce consumer buying power in those key markets for Samsung.

Chinese manufacturers such as Huawei and Xiaomi could emerge as serious rivals to
Samsung. These companies’ share of the critical mobile device market is growing
while Samsung’s is falling.

Apple could enter more consumer products areas such as home appliances and
cameras and directly compete with Samsung in those markets.
 24

3. LENOVO
Lenovo is a Chinese multinational technology company with headquarters in Beijing,
China and Morrisville, North California. It design, develops, manufactures and sell
personal computers, tablet computers, smartphones, electronic storage devices, IT
management software and smart televisions.

In 2010, Lenovo introduces LePhone, its first smartphone. In May 2012, Lenovo
announced an investment of US$793 million in the construction of a mobile phone
research and development facility and factory in Wuhan, China. The facility, called
the Lenovo Industrial Base, was scheduled to start operations in October 2013. In
March 2014, Lenovo renamed its mobile device division to the Mobile Business
Group. It was formerly known as the Mobile Internet and Digital Home Group.

Lenovo’s vision is “At Lenovo, our vision is that Lenovo will create personal devices
more people are inspired to own, a culture more people aspire to join and an enduring,
trusted business that is well respected around the world. This vision guides us in
pursuit of our mission to become one of the world's great personal technology
companies. Our culture defines us … it's our DNA. We call it the Lenovo Way and it's
the values we share and the business practices we deploy. It's how we address our
 25

day-to-day commitments. The Lenovo Way is embodied in the statement: We do what

we say and we own what we do.

That culture also drives how we work every day, utilizing what we call the 5 P's:

 We PLAN before we pledge.

 We PERFORM as we promise.
 We PRIORITISE the company first.
 We PRACTICE improving every day.
 We PIONEER new ideas.

LENOVO’S MERGERS AND ACQUISITIONS:

Lenovo, which bought Motorola from Google back in 2014, has announced it will
overhaul the brand to "Moto by Lenovo." The move will also see a change in the
company's strategy for phones which will use Moto branding for high-end handsets
while the budget segment will have Vibe. the company however played down the
rebranding, saying: "Motorola Mobility continues to exist as a Lenovo company and is
the engineering and design engine for all of our mobile products. However, for our
product branding we will utilise a dual brand strategy across smartphone and
wearables going forward using Moto and Vibe globally. "Motorola" hasn't been used
on our products since the launch of the original Moto X in 2013."
 26

Lenovo has started the process of integrating its Mobile Business Group (MBG) into
Motorola Mobility. Lenovo Mobile employees joined Motorola staff. Motorola,
having higher headcount, will lead Lenovo Mobile team.

ZUK Mobile is a subsidiary of Lenovo that sells exclusively using its own brand.
Each letter of "ZUK" is pronounced separately. ZUK was originally dubbed Shenqi.
ZUK is a part of Lenovo's strategy to sell higher quality, higher margin devices with a
"young, refreshed brand." Xiaomi is considered ZUK's primary competitor. ZUK will
market its products worldwide. Lenovo launched an array of smartphones under the
brand name, but the devices did not leave a great impact in the market.

Lenovo Starts Production In India:

Chinese personal computer maker Lenovo Group Ltd on Tuesday said it has started
assembling smartphones at the 40,000 sq. ft facility in Chennai run by Singapore-
based contract manufacturer Flextronics International Ltd.

The factory will have two dedicated lines to manufacture Lenovo and Motorola
smartphones.

The company plans to produce 6 million units in 2015-16 beginning with two 4G
models, Moto E and Lenovo K3 Note, and raise it to 12-14 million units in the next
financial year.

The move is significant for Lenovo globally, as the Chinese giant looks at an
integrated model for both Lenovo and Motorola brands of phones. The firm plans to
source 30% of the components locally for the Indian market, but declined to give any
time frame.

India has been the key market for Lenovo since the past 10 years after the company
acquired the personal computer business of International Business Machines Corp.
(IBM) in 2004. In India, Lenovo’s smartphone shipment market share increased from
0.6% in the March quarter of 2014 to 4.7% in the December quarter of the same year
(primarily due to the acquisition of Motorola), according to data from Hong Kong-
based Counterpoint Research. It rose to 6% in the June quarter of 2015, becoming the
fifth-largest smartphone maker in the country, according to data collated by researcher
International Data Corp.
 27

SWOT ANALYSIS OF LENOVO

STRENGTHS
Complete in of products from smartphones to data centres.

High exposure in China and other emerging markets: Lenovo’s high exposure in the
highly growing China market and presence in other emerging markets around the
world has helped the company witness high growth in the recent years. It also
guarantees high growth in the future.

Lenovo has set up its production unit in India so their cost of production is low. It
gives great advantage to the company for making profits.

Lenovo acquired Motorola from Google. They have so acquired IBM’s ThinkPad
notebook computers.

Lenovo is having a strong product portfolio including personal computers,

smartphone, tablet computers, electronic storage device, scanners and smart
television. By having variety of products it achieves stabilized earnings throughout the
year.

Lenovo has workforce diversity as they are operating in 60 countries.

WEAKNESS
Lenovo has recalled a number of products in the recent years. For instance, recalling
lithium-ion batteries in April 2015 globally. These batteries are used to produce
ThinkPad computers for Lenovo. Such recalls affect the brand image and trust on the
brand.

Lenovo has slow market share growth. Due to an entrance of other companies and
duplicity of products, Lenovo hasn’t been able to expand its market share in
smartphone and PC category so much.
 28

Lenovo reported the lay-off 3200 employees as the profit declines by 51% in the first
quarter of 2015. It created panic among all employees of losing their jobs in case of
any bad time of the company.

OPPORTUNITIES
Smartphone market is growing globally and is expected to grow at a rapid pace in the
medium term especially in the emerging markets. This gives an opportunity for
Lenovo to expand its revenues.

In the recent past, Lenovo has strategically acquired a number of companies to

broaden its product portfolio and expand its reach. For instance, acquisition of
Motorola Mobility from Google in 2014. Such acquisitions help Lenovo to enhance its
customer base and revenue and Lenovo should look forward to it.

Lenovo is thinking to shift its focus from China to the rest of the world as said by
Lenovo’s CEO.

Lenovo must look to increase their focus towards mass market to increase their profit
margin.

THREATS
Lenovo faces intense competition from various global companies such as HP, Dell,
Samsung, Apple and Acer etc. in the PC and smartphone market. Competitive
pressure can affect Lenovo’s market share and also challenges Lenovo to constantly
innovate.

The global PC market is declining with the increase in popularity in mobile computing
with smartphone and tablet devices. This could definitely impact the company’s
bottom-line as 66% of the company’s total revenue is from its PC division.

Average selling prices (ASPs) of smartphones are on a declining trend and will
continue to decline with cheaper cost of production and other cost reduction methods.
With declining ASP for the industry, Lenovo also comes under pricing pressures and
thus profitability gets affected.
 29

VIVO
A young global smartphone brand focusing on introducing perfect sound quality and
ultimate photography with cutting-edge technology, Vivo develops dynamic and
stylish products for passionate young people. It develops and manufactures
smartphones, smartphone accessories, software, and online services. Founded in 2009,
Vivo has quickly expanded into markets in India and South East Asia.

Vivo believes in diversity and creativity in India and hence has been actively involved
in some of the most popular properties such as Colors Comedy Nights with Kapil,
MTV Roadies, MTV Bollyland Festival and Vh1 Emerge. Regionally vivo sponsored
Vijay TV--Koffee with DD (Season 2), ETV Telugu--Extra Jabardast, ETV Kannada--
Majha Talkies, Mazhavil Manorama--D 4 Dance (Season 2), and Zee Kannada--
Onduurnalli Raja Rani. As a new brand for Indian consumers, vivo believes in
reaching out to every person in every state and this increases the kind of effort to
establish the brand in the hearts of consumers. Vivo looks forward to more such
associations in the future to create a brand visibility amongst the Indian masses.

Vivo’s Mission and Vision:

To customers, we promise to provide quality products and superior services.

To employees, we commit to build up harmonious work atmosphere of mutual

respect.
 30

To business partners, we shall furnish a fair and square cooperative platform on the
basis of equality and mutual benefit.

To shareholders, we are devoted to rendering higher investment returns than average

Vivo’s Make In India Initiative:

“We came to India with a vision to give our customers ingenious, ‘Made In India’
products. A year later, with an assembly unit all set to operate from Greater NOIDA,
our vision has now become a reality.

The first part of our expansion plan in India, we setup the assembly unit to contribute
to the ‘Make In India’ initiative with our exclusive ‘Made for India’ V-series
smartphones.

The 30,000 square metre production facility, located at World Trade Centre, is Vivo’s
7th largest assembly facility outside China. The assembly unit has a maximum
production capacity of 1 million smartphones per month, which can be further
increased as per future requirements.”

Vivo’s Performance in 2017:

After having a notable market share in its domestic country, Vivo is now looking
forward to grabbing more shares in Indian marketplaces. As said by the CEO of Vivo
India, Kent Cheng, the company is now slowly moving ahead to acquire 10% of
market share in India by the end of the next year. With the planning to boost up its
capability of local manufacturing in India and developing its e-com strategies, Vivo is
on its way to dominating Indian market in the near future.

While Addressing to the reporters of The Economics Times, Vivo India head said, the
company is now planning to sell its handsets via e-commerce sites and is preparing
different marketing policies for online and offline selling in India. Apart from this,
 31

Vivo is also setting up to invest a whopping amount of 200-300 crores in its Indian
marketing segment, for promoting its smartphones more.

According to the statistics, Vivo till now has maintained a good rank in Indian offline
retailing. The analysis shows that Vivo has an active offline channel in India and
operating more than 15,000 retail outlets across 400 cities. However, as the trend of
online shopping is mounting in India, Vivo is now planning to boost up its online
channels and conducting the sale on different e-commerce platforms. Though all most
every Chinese smartphone manufacturers are moving forward with the stronger online
presence, Vivo as an exceptional case prefer to strengthen its offline edge and
somehow also get high success in reaching out to the Indian consumers.

Presently, Vivo is operating in India with 18 smartphones including its X, V, and Y

flagships and the price ranges from Rs. 7, 500 to Rs. 23, 000. While addressing to The
Economics Times, Cheng said that Vivo despite having an extensive network in its
domestic country and the company is planning to replicate the same model in India. In
China, Vivo has acquired 3rd rank in China with the marketing share of 13.2%. By the
end of June, Vivo has sold roughly 14.7 million units in China and India; it is aiming
at obtaining that position. In the second quarter of this year, Vivo crossed the
milestone of 1 million sales in India, which is signifying a hike of 200% in its
popularity in India.

Vivo's technology department has kicked off the research and development for its 5G
smartphone prototypes next year, as well as combining artificial intelligence (A.I.)
with it. As an official FIFA World Cup Sponsor, Vivo, a young leading global
smartphone brand, reveals the special edition handset created for the 2018 FIFA
World Cup Russia and has specially created the FIFA World Cup edition handset for
FIFA staff at the tournament. 32 teams have booked their places at the tournament,
and the Final Draw was held on 1 December at the State Kremlin Palace in Moscow.
 32

VIVO’s SWOT ANALYSIS

STRENGTHS
Vivo is getting good celebrity endorsement as the new age superstar Ranveer Singh is
promoting Vivo’s smartphone.

Vivo is producing good camera phones in the budget segment. Vivo has also marketed
itself as a smartphone for camera and music. The quality of pictures produced by
Vivo’s camera is the best in the price range. Vivo has also brought the concept of
moonlight selfie by providing a front facing flash.

Vivo made its products available through distributors & resellers far and wide across
the country and also exported it to many countries. The advantage was that it gained
many customers due to its strong distribution channel. It also tied up with E-
commerce companies as exclusive partners.

Vivo has gained enough experience to focus completely towards the urban market in
their current and future strategies. Due to this they have an increased customer base,
Vivo has seen success in the last 2 years.

After hopping from DLF to Pepsi and then finally into Vivo’s lap, IPL is the most
expensive sports event in the country – in terms of sponsorships, ad rates, associations
and even players’ pricing. Vivo tied up with IPL in the 2016 and 2017 editions of the
tournament, shelling out Rs 196 crore.

WEAKNESS
Although Vivo has been successful in its operation, it is not a preferred brand by tech-
savvy people.

Vivo have operation only in SAARC countries which is restricting their growth.
 33

Vivo is using Mediatek’s Helio processor in the majority of its devices which is
considered inferior to the company that are using Qualcomm’s Snapdragon processor.
Mediatek’s processor is also slower than the Qualcomm’s.

Vivo is paying higher interest to the local retail shop to sell their phones. A customer
may feel that the quality of the product is not up to the mark and so they have to pay a
higher interest to the retailers.

OPPORTUNITIES
Entering in developed nations like US & European nations will be the future strategy
of Vivo which will bring advanced capabilities to even home nations & this will help
Vivo in creating trust among its users.

Vivo must work on changing the brand positioning will help the company in changing
its brand image in the urban markets where it is perceived as a low quality mobile.

Vivo has a large number of potential customer and a huge Indian mobile market to sell
its product in the coming years.

Vivo has invested in the sponsorship of upcoming IPL and FIFA World Cup. World
Cup sponsorship will help them to get recognition in the European markets as well as
the Amercian market.

THREATS
Handset market is going through intense transformation & all the national &
international players are leaving no stone unturned to increase their market share.
Price wars & eating up each other market share is a common scenario.

Continuously changing technological environment can be serious threat to the Vivo.

Since already established players like Samsung, Xiaomi etc. can cope with this, it will
difficult for Vivo to handle this challenge.
 34

Vivo has a negative public image in the mind of the tech-savvy people. These people
serve as the opinion leader for a majority of the customers. A negative image in the
minds of these people can lead to the downfall of the company in the coming years.

Vivo must produce something in the cheap range of five thousand to ten thousand.
They have only two products in this price range where other companies like Xiaomi,
Samsung, Lenovo etc have five to six phones in the offering.
 35

5. OPPO
OPPO Electronics Corp. (commonly referred to as OPPO) is a Chinese consumer
electronics and mobile communication company. OPPO's major product lines
include smartphones, Blu-ray players and other electronic devices. The brand name
OPPO was registered in China in 2001 and launched in 2004. The company has
registered the OPPO brand name in many parts of the world. OPPO is now known
primarily for its smartphones, mainly targeting younger consumers.

The selfie expert and leader, OPPO is ranked as the number 4 smartphone brand
globally since 2016* and is providing excellent selfie experiences to more and more
young people around the world. For the last 10 years, OPPO has been focusing on
selfie technology breakthroughs. OPPO innovated selfie beautification and drove the
selfie trend in the smartphone industry. In 2017, OPPO introduced A.I. to the
front camera and is leading a brand new era of the selfie.
 36

OPPO PERFORMANCE IN 2017:

Oppo Mobiles, the Chinese smartphone maker known for its selfie-centric handsets
saw its sales grow 750% in India this year. With strong demand for its mobile devices,
Oppo India has surpassed the home-grown smartphone maker Micromax and Japanese
tech giant Sony in terms of revenue.

The latest regulatory filings show Oppo Mobiles India saw its sales jump to Rs
7,974.29 crore for the fiscal year ending March 2017, a gain of 754% over the
previous fiscal year. According to Economic Times, Oppo Mobiles India added more
than a billion dollars to its revenue from the India market in just a year. This growth in
sales comes despite analysts believing that sales have declined in the recent quarter
and the company has started cutting down on its investment. The company has grown
despite demonetisation in November last year, which slowed sales of smartphones in
the offline space.

The strong growth in sales is mainly driven by massive advertising and aggressive
push into the offline retail segment. Along with Vivo, Oppo has sponsored major
cricket tournaments in the country and is also offering huge margins to its retailers.
Another contributor to strong performance in fiscal year 2016-17 is Oppo’s strategy to
buy retail shelves to place its handsets and promote its branding.

Oppo has dropped to fifth among leading smartphone brands in the country at the end
of third quarter, IDC noted in its recent report. The company is also seeing strong
resistance from rival Xiaomi, which has also entered the selfie-smartphone segment
and is slowly expanding in the offline retail segment. Xiaomi recently took joint lead
with Samsung in the smartphone segment and its sales have nearly doubled in the
country.
 37

SWOT ANALYSIS:
STRENGTHS

Oppo phones come with great features and have launched first-ever rotating phone
camera and many other features which are never launched by any other phone.

Oppo phones has collaborated with big celebrities (Deepika Padukone and Hrithik
Roshan) and made them ambassadors to market the product better and position the
phones in the minds of the customer.

Oppo has been able to make its name and position in the market in a very short period
of time due to its very exciting features offered to the customers.

The Oppo phones are available at affordable prices which is another factor which
made Oppo phones readily accepted by the consumers in the market.

Oppo has not only being marketing phones but at the same time are into Blu-ray
devices and headphones.

Oppo phone’s parent brand owns other two famous phone brands as well which are
one plus and Vivo. This depicts that Oppo has a very strong strategy in place to
market phones at different segments.

WEAKNESSES

Mobile Phone market is highly competitive and there are numerous players who are
fighting for the same market and hence it becomes very difficult

The user interface is not made keeping in mind the usage from the non-tech savvy
consumers.

One of the main disadvantages of buying Oppo series is that the after sales support
extend by the brand is not good. After sales service built the trust in the brand that in
case something goes wrong then service centres are there to help them out but Oppo
 38

has not been able to provide good support to the customers which inhibit its growth in
the market ass customers cannot trust the brand.

The quality provided by the Oppo phones at the price they put is inferior and hence
the trade-off is clearly seen in the price. Low price low quality.

OPPORTUNITIES
Oppo can try to associate with events to market to wider and different segments of
customer that will help to enhance the customer base

Oppo can launch newer phones that can compete with other big market players like
Samsung and Apple which will help to increase the visibility of the brand in the
market.

International markets offer Oppo new opportunities to expand the business and
increase sales.

THREATS
The mobile phone market is intensively growing and it is getting price competitive
which makes it very difficult to survive in the industry.

The profitability of the mobile phone market attracts new players in the market which
eats away the market share further from the cell phone manufactuer.

Oppo does not have a good image in the minds of tech-savvy persons. These people
serve as the opinion leader for a majority of the customers. A negative image in the
minds of these people can lead to the downfall of the company in the coming years.
 39

OTHER PLAYERS IN INDIA’S SMARTPHONE WORLD

APPLE
Apple Inc. is an American multinational technology company headquartered in
Cupertino, California that designs, develops, and sells consumer electronics, computer
software, and online services.

The data claims that purchase intention is high in the country this year. Apple
currently owns 3 percent of the market share. This is expected to grow in the near
future.

HUAWEI
Huawei Technologies Co., Ltd. is a Chinese multinational networking and
telecommunications equipment and services company headquartered in Shenzhen,
Guangdong. Honor shipped 98.8 per cent more devices in 2017 (to India) than in
2016. Huawei sells Honor smartphones online. Honor is planning to start selling
artificial intelligence (AI) enabled smartphones in India early next year which, it says,
will be able to sense who is using the phone, translate messages as per preference of
the phone owner etc.
 40

ONEPLUS
OnePlus is a Shenzhen based Chinese smartphone manufacturer founded by Pete Lau
and Carl Pei in December 2013. The company officially serves 38 countries and
regions around the world as of March 2016.

According to a report by Counterpoint Research, OnePlus emerged as one of the top

players in India’s premium smartphone market in Q4 2017, as it grew 234 percent
from Q1 2017. The report further indicates that the premium segment accounted for
20 percent of the Indian smartphone market in terms of value.
 41

MARKET SHARE:
Apple and Samsung might be the world’s most popular smartphone makers, but their
slices of the market share are on the decline.
Samsung was the world’s top smartphone maker in the first quarter with 78.7 million
shipments worldwide in 2017. While that was enough to give Samsung 20.7% of the
market, its shipments were down from 81.2 million and 23% market share during the
same period last year. The decline was due in part to “fierce competition” in lower-
end smartphones.
Apple is having a problem in Asia as the iPhone's market share in that region has not
been growing in some countries; even worse, it is declining in others. Competition
from Chinese handset manufacturers has been brutal as companies like Xiaomi, Vivo
and Oppo have been able to attract consumers by offering high-end units at lower
prices. And by including some features not found on the iPhone, such as enhanced
front-facing selfie cameras and larger capacity batteries, these companies are taking
sales away from Apple.

In India and Indonesia, the average smartphone sells for $200, which means that most
consumers in those countries have to look at other options instead of buying the
iPhone. The only iOS flavored handset that is close to that price tag is the Apple
iPhone SE, the 2016 4-incher that is actually being produced in India. Earlier this
year, there was talk about Apple offering a sequel called the iPhone SE 2. The newer
version is rumored to keep the 4-inch LCD screen, but is said to have an Apple A10
Fusion chipset under the hood, and support wireless charging.

Apple's market share has dropped in China from 13% of the smartphone market in
2013, to 8% now. In India, the world's second largest smartphone market after China,
Apple owns 2% which leaves plenty of room for improvement. However, considering
that it is pricing holding back Apple in that country, it is hard to see how the company
 42

will be able to compete with the lower priced Chinese manufacturers. One 28-year-old
graphic designer in the country, Abhay Shahi, swapped his iPhone 6 for a brand new
Xiaomi Redmi Note 4 for roughly $200. Calling the iPhone "overpriced," he notes
that his new phone "has a fingerprint sensor, the camera is pretty good, and there’s no
lag." Xiaomi has hit a grand slam in India, where its market share has soared from 3%
in 2015 to 19% last year.

While Xiaomi pushed hard in India over the last couple of years, Oppo and Vivo are
now landscaping Indonesia and India with billboards showing off features on their
handsets that are not found on an iPhone. For example, some of these phones have
software that smooths out wrinkles so that self-portraits make the subject look
younger. This is a feature not available to iPhone users.

COMPETITION FROM INFERIOR BRANDS:

Tecno, Infinix and Itel are the inferior Chinese brands that have entered India and they
will be competing with the brands like Xiaomi, Motorola and Samsung in the
midrange and lower segment of the smartphone industry..

Tecno Mobile, a subsidiary of Hong Kong-based company Transsion Holdings that's

also known for its Itel and Infinix brands, on Monday unveiled five smartphones for
India at an event in New Delhi. Called the Tecno i3 (Rs. 7,990), i3 Pro (Rs. 9,990), i5
(Rs. 11,490), i5 Pro (Rs. 12,990), and i7 (Rs. 14,990). All prices stated are market
operating prices. The company says it will launch its smartphones in the country with
a 'Tecno 151 Promise' - this is meant to signify a 100-day replacement guarantee, 50
percent buyback, and 1-year one-time screen replacement. This offer will be free for a
limited time.

‘Infinix’ in the Indian market will target the online segment in India. “Infinix is aimed
at online consumers. We are launching two devices today and will bring our Zero
(flagship) and S range (selfie phones) also in the future,” Infinix India CEO Anish
Kapoor told. He added that the Infinix brand launch is a part of the company’s
strategy to have multiple offerings for various market segments
 43

Itel Mobile claims its focus is on delivering cost-effective and high-specification

mobile devices. Itel's latest mobile launch is the A44 Pro. The smartphone was
launched in March 2018. The phone comes with a 5.45-inch touchscreen display with
a resolution of 720 pixels by 1440 pixels. With a 9 per cent market share, China-based
Transsion Holdings' Itel Mobile registered a 217 per cent growth in India in 2016-
2017.
 44

CONSUMER DECISION MAKING PROCESS

One of the fundamental issues in consumer behaviour is the way consumers develop,
adapt and use decision-making strategies (Moon, 2004). Consumer decision making
could be defined as the “behaviour patterns of consumers, that precede, determine and
follow on the decision process for the acquisition of need satisfying products, ideas or
services” (Du Plessis et al.,1991).
Consumer decision making has long been of great interest to researchers. Early
decision making studies concentrated on the purchase action (Loudon and Bitta,
1993). It was only after the 1950’s that modern concepts of marketing were
incorporated into studies of consumer decision making, including a wider range of
activities (Engel, Blackwell and Miniard, 1995). The contemporary research indicates
that more activities are involved than the purchase itself. Many other factors influence
the consumer decision making than the final outcome. Vast numbers of studies have
investigated this issue and many models have been developed accordingly. Models
aim to depict the purchase decision-making process and its influential factors.

Consumer behaviour is a wide range of study about the decision making processes
that a consumer make at the time of making a purchase. According to Kotler (2009)
“Consumer behaviour is the study of how individuals or groups buy, use and dispose
of goods, services, ideas or experience to satisfy their needs or wants.”

Usually a buyer passes through five stages to reach his buying decision. First the
buyer notices the difference between his current state and ideal state and recognizes
his want and need for something. A need can also be aroused by external stimuli.
He/she starts searching the information for his/her desired product through different
channels like family, friends, advertisement or mass media. After sufficient
information is gathered, the buyer processes the information to evaluate the
alternatives brands in the choice set. Finally he purchases the product which he
assumes to be the best for him. After purchasing the product, the buyer will take
 45

further action to the marketer based on his satisfaction or dissatisfaction (Kotler,

2009). For purchasing a smartphone a buyer goes to these five stages. These stages
help the buyer to evaluate his/her needs, choose the best smartphone according to his/
her need and budget and purchase it.

BRAND CONCERN
Brand is the most valuable asset for a company, where it represents a product or
service means to consumers. Brands are more than just names and symbols. It is also
the element of relationship between company and customers (Kotler and Armstrong,
2010). The brand name has directly influenced customer’ s perception toward the
quality of the offering. When customers are satisfied,they generate word of mouth and
it will lead to others to be interested and choose the brand (Azadand Safaei, 2012).
To enhance consumer response, marketers strive to build brand equity in order to
capture consumer preference and loyalty. Brand equity is the added value endowed on
products and services and it may reflect how consumers think, feel and act with the
brand. A study on the effect of brand name toward cars shows that people trust the
well know brand for its quality, performance and believe that brand shows a person
lifestyle and societal status. Brand is a name, term, design, symbol or any feature that
identifies one seller’ s goods or services as distinct from those of other sellers.
According to research, brand has a moderate impact on consumer behavior. In terms
of gender, it's impact female more than male.
 46

PRODUCT FEATURE CONCERN

Feature is an attribute of a product to meet the satisfaction level of consumers’ needs

and wants, through owning of the product, usage, and utilization of a product. Product
features including hardware and software. Hardware is the description for a device
that can be touched physically. The hardware of a Smartphone is the body of the
phone itself, size and weight. Colour and design are also considered as hardware as it
is the physical appearance of the Smartphone. Software whereas is the general term
for computer programs, procedure and documentation. The software of a Smartphone
is the operating platform, storage memory, or apps that run the phone.

SOCIAL INFLUENCE CONCERN

“A consumer behaviour is influenced by social factors, such as the consumer’ s small

groups, family, and social roles and status” (Kotler and Armstrong, 2010). During the
decision making process, consumers tend to always influence by the social group,
which is the people. Depending on various factors, consumers might listen and believe
in different social groups, perhaps to those who are more professional in certain fields.
According to research in Malaysia, 35.6% of 1814 respondents feels that the trend in
community is one of the important criteria that influence Smartphone purchase
decision (Osman,2012).
 47

A research objective is a clear, concise and declarative statement which provide

direction to investigate the variables. Generally research objectives focuses on the
ways to measure the variables such as to identify or describe them.

Primary Objective
 To ascertain the ideal smartphone.

Secondary Objectives
 To ascertain prevailing smartphone brand.
 To find out the amount that the customers are willing to shell out in order to
purchase a smartphone.
 To know whether promotional activity influences customers purchase
behaviour.
 To determine the place where smartphone is purchased.
 To find out the most attractive colour.
 To know the best service provider in the smartphone industry.
 To know the reason behind purchasing smartphone.
 48

Research is an art of scientific investigation which includes collection, analysis and

interpretation of data. It is a process of systematic study. Research has to proceed
systematically in the already planned direction with the help of a number of steps in a
sequence.
To make the research systemized, the researcher has to adopt certain methods. The
method adopted by the researcher for completing the project is called Research
Methodology.

It is a blue print that is followed in completing a study.

Every research design consists of a proper sequence and same has been done here. It
consists of the following stages:

 Identifying and formulating the research problem.

 Choice of research design.
 Determining the source of data.
 Designing the data collection form.
 Determining the sample design and sample size.
 Organising and conducting the field study.
 Processing and analysing collected data.
 Preparing the research report.

RESEARCH DESIGN

 The type of research adopted in the present study is the descriptive research.
 A quantitative research approach has been adopted for this study.
 A single cross sectional research design has been followed where in a single set
of respondents have been chosen from the target audience ( college students of
Kolkata) and information has been collected from their responses only.
 49

SAMPLING TYPE

A convenience sampling technique was adopted to draw a representative sample

from among the various college students of Kolkata, West Bengal. It is a non-
probabilistic type of sampling.

SAMPLE SIZE
The sample size that is taken here for the study is 70.The respondents mainly
consist of college students and school students, who are at present studying in one
of the many colleges and schools in the Kolkata region.

DEMOGRAPHIC PROFILE OF SAMPLE

 The respondents consists of college students and school students, who were
mainly urban youth who hail from different parts of Kolkata.
 They belong to the age group of years of age.
 Respondents include both male and female gender.

RESEARCH INSTRUMENT
Quantitative data collection was achieved by self-administration of the
questionnaire. The questionnaire was distributed through Google forms.

Data analysis has been mainly done using Microsoft Excel..

The tools used are:

 Bar Graphs
 Pie Charts
 Measures of Central Tendency
 50

Primary Data Collection

Primary data are the data that are collected for the specific research problem in hand,
using procedures that fit the research objective best. For this research, to analyse the
consumer behaviour toward smartphone in Indian market primary data is collected
through surveys. As this research use the quantitative method for data primary data
collection, the research questionnaires were distributed among the selected sample for
the research via e-mail or Facebook, questionnaires was shared via Google Drive the
link shared on Facebook and e-mail. Using Social Media’ s platforms and tools as a
way to collect data was very valuable as it allowed to quickly sharing the
questionnaires by posting on Social Networks websites and sending messages to my
contacts to ask them to share the questionnaires to their own contacts. The link was
shared on various pages in Facebook which helped in reaching various masses.

The survey was done among 71 people living in Kolkata. Then descriptive statistics
like graph, pie chart were prepared according to the data collected. The results of the
statistical analysis helped in the testing of the hypotheses of this research and also in
answering the research questions and meets the research objectives of this study.

Secondary Data

Literature Review from various articles, websites and journals that are available
online . Reference to different books and online websites has taken place.
 51

DEMOGRAPHIES WITH RESPECT TO THE STUDENTS

INVOLED IN THE SURVEY:

IMPLICATION: The Survey carried out reveals that 66.2% of the respondents are
males and 33.8% of the respondents are female.

Hence it is the data collected is having twice as many response from males as
compared to females.
 52

IMPLICATION: The survey is mostly filled by the people who are 21 years old and
we see the total majority of youths.

Hence the data collected majorly involves young population.

 53

RESPONDENTS WHO PREFER TO USE SMARTPHONE

IMPLICATION: Almost everyone involved in the survey are using smartphones.

The survey tells us that smartphones are well in demand and this industry has a wide
scope in the market further.
 54

BRANDS OF SMARTPHONES USED BY THE

RESPONDENTS

IMPLICATION: 20 of the 71 respondents are using Xiaomi’s phone. We also see a

tough competition between Lenovo/Motorola and Samsung.

Others have a major share of Apple and OnePlus followed by Honor (Huawei).
 55

RESPONDENT’S REASON BEHIND PURCHASING A

SMARTPHONE: (BASED ON FEATURES)

IMPLICATION: Out of 70 response received, majority of the respondents are found

to purchase their smartphone on the basis of the processor and some other reason.

Camera is also considered by the respondents while purchasing a smartphone.

 56

RESPONDENTS BUDGET FOR BUYING A SMARTPHONE:

IMPLICATION: We see that nearly 57 respondents out of 71 are having a budget

below twenty thousand for buying a smartphone. Only 9 respondents were interested
in buying premium smartphone and shell out a huge amount from their pocket. These
9 people account for 12.7% of the respondents.
 57

RESPONDENTS BEHAVIOUR TOWARDS A

PROMOTIONAL ACTIVITY CARRIED OUT BY
SMARTPHONE SELLERS:

IMPLICATION: Promotional activity used by the smartphone sellers are having

little or no impact on the buyers as only 18 out of 71 respondents which accounts for
25.7% have purchased smartphone because of any promotional activity. Rest of the
consumers have no effect on their buying behaviour.
 58

PLACE THAT IS CONSIDERED BY THE RESPONDENTS TO

PURCAHASE A SMARTPHONE:

IMPLICATION: The respondents feel that online market is a better place to buy a
smartphone as compared to traditional retail stores. So smartphone industry must
focus on online markets more as compared to the retail stores.
 59

RESPONDENTS VIEWS REAGARDING COLOUR OF

SMARTPHONE:

IMPLICATION: Colour does effect the respondents decision while purchasing a

smartphone as it is agreed by nearly 73.2% of the respondents which account for 52
people.
 60

IMPLICATION: Black is preferred as the best colour when it comes to buying

smartphones. It just received more than 50% of the votes. No other colour seems to
have an effect on the consumers buying behaviour.
 61

WHICH IS THE BEST SERVICE PROVIDING COMPANY

ACCORDING TO THE RESPONDENTS:

IMPLICATION: Respondents say that Xiaomi and Samsung are the brand that
provides best service to their customers. Apart from these company’s no other
company seems to satisfy their customer when it comes to after sale service.
 62

REASON FOR BUYING A SMARTPHONE (BASED ON

USAGE):

IMPLICATION: Majority of the respondents are buying smartphone for taking calls,
internet surfing and media consumption. Smartphone makers must take a note of it
and must design a type of smartphone that handles these tasks well.
 63

After conducting the research and going through the literature review of various
research works, I found the following things related to the objectives of my study:

 Reason for buying a smartphone is for calls and media consumption and the
customers are looking at the processor and the camera before buying a
particular smartphone.
 The prevailing smartphone was Xiaomi. Hard-work has paid off for them as
they dethrone Samsung as the leading smartphone company. Samsung was the
market leader in India since Nokia’s downfall in 2011. This legacy of five
years is over.
 Promotional tactics used by the smartphone sellers have no or little effect on
consumer buying behaviour. Consumers are looking for the best option
available to them at their price point and are willing to purchase without any
promotional offers.
 Black prevails as the most wanted colour in the industry of the smartphones.
Consumers also showed interest towards Rose Gold but Black is Black.
 Smartphone buyers have shifted from buying from tradition stores to online
stores. They are getting better option in the online market as compared to the
retail stores.
 64

 After sale service which is the most important task for customer satisfaction is
also done accordingly by the industry leaders Xiaomi and Samsung. No doubt
why Xiaomi is the current and leader and why Samsung was leading from
years in India.

IDEAL SMARTPHONE
After carrying out my research work and doing proper analysis, it is the right time to
know the features of an Ideal Smartphone:

 Processor- a processor can be said to be like the ‘engine of a car’ , which

basically runs the whole scene for the device in question. The more powerful
the processor of your smartphone is the faster it performs and the more number
of tasks it can carry out simultaneously. Qualcomm is one of the best
processors makers when it comes to smartphone industry. Snapdragon is the
name of their processor. Companies like Xiaomi, Lenovo/Motorola uses this
processor, whereas Honor has its own processor named as Kirin, Apple is
having its own processor and Samsung has their Exynos processor.

Processor is looked upon by the customer before buying a smartphone.

Therefore, the company must choose upon the processor wisely. Snapdragon
600 series (625,630,660 etc) which is an octa-core chip set will be the best pick
considering the price point.
 65

 Camera- The game has totally changed when it comes to camera companies
are coming up with quad cameras in a smartphone; two at the back and two at
the front. Providing a good quality lens is also required. Sony IMX sensors
would be the best pick.

 Build Quality- Although this parameter received less attention but a good and
a tough build quality will be accepted by the customers. Those days of making
smartphones out of plastic are gone. Aluminium is preferred and even having a
glass back is a trend nowadays. Companies must provide Corning Gorilla Glass
at the front.
 Price- Pricing is another important decision that will influence the sale of a
smartphone. Competitive pricing policy should be adopted by the companies to
get an edge over other competitors. According to the survey carried out we see
majority of the respondents are willing to pay eleven to fifteen thousand, so it
must be priced in that range.
 Place- Buyers of smartphone have moved from retail to online stores.
Therefore, the company must evaluate its alternatives and choose the right
domain for selling the smartphone.
 Promotion- We see that customers are hardly affected by the promotional
activities adopted by the smartphone companies. So, it will not be
recommended to go for promotional activities.
 66

While conduction the research time management can be a limitation as this was an
analysis of the smartphone market. It is a vast sector and the Indian market is very
huge so, in order to complete the research on schedule time management was very
important. The time taken to conduct the paper including preparation, research,
analysing findings and drawing conclusions was excessive.

The research is conducted with only 70 respondents which is a small number and it
stands nowhere when compared to the population of our country. Hence, this will not
give a proper picture of the case.

This is a study only conducted with the people living in Kolkata so this cannot serve
the view and perception of all the people living in our country.

The time invested in doing the survey is less. More time should be spent to get a
fruitful result and to get a full picture of the consumer behaviour.
 67

Based on the information obtained from the study towards factors affecting
Smartphone purchase behavior among Generation Y, some managerial implications
and recommendation of researcher are given, where it might be useful for the
companies for their future strategies planning on improving Smartphone sales. With
the large opportunities in the Smartphone market in the near future, Smartphone
provider should seize the opportunities to fulfill what affects Purchase Decision of
users.

The study shows majority of the Smartphone users will consider product feature at
first. Smartphone provider should study on what features the users demand for, for
example higher image resolution of the camera, better and faster operating system,
smarter and lighter design, and any other new innovative of product features for both
software and hardware. By better improve the Product Feature, and providing what is
demanded, it might help Smartphone provider to improve sales and profit.

Convenience is the second consideration based on the research, indicate that

Smartphone users buying Smartphone due to its convenience. With Smartphone, tasks
can be accomplished faster, and users do not bring a laptop because Smartphone can
perform what laptop could. Smartphone providers can focus on making Smartphone
usage more convenience such as longer battery life, a slightly larger screen size that
making use Smartphone everywhere is convenience.

The third consideration of Smartphone purchase decision is a Brand. It is important

for the Smartphone provider to build their strong brand name, particularly by
innovating something new and be the pioneer in the market, or by its unique selling
proposition. Perhaps, not only the Smartphone product itself only could help to build
the brand, Smartphone provider can consider other method such as good customer
service, social responsibility and many more. With international recognized and strong
 68

brand, users are more confident in that brand and it is perceived to be more
trustworthy. Followed by dependency, the result shows dependency will influence the
purchase decision and for some users, they might depend to the Smartphone until
feeling insecure when Smartphone is not around.

However, it is not the main factors to affect the purchase decision. To improve,
Smartphone provider can innovate something for users to depend on it. For example
alarm, mapping, documentation and contact list are the existing features to make users
dependent on the Smartphone, especially for students and working class,
documentation somehow can be very important to them and for drivers, they are much
dependent on the map during they are driving on the road.

Social influence also has a significant impact on Smartphone users purchase decision,
where users are referring to friends, family, and people around them. It also has less
impact on affecting the purchase decision as compare to the other selected variables
tested in this study. Smartphone provider could have more socializing with the
targeted market create positive word of mouth among them to spread it to others.
Even though research shows a relatively low effect, but the social influence could
really affect one’ s purchase decision. Thus, better customer service and after sales
service should also be provided in order to create dissatisfaction and create negative
word of mouth. Lastly, price has the least impact on Smartphone users’ Purchase
Decision, which indicates that pricing strategy should not be the main concern for the
company.

Price of Smartphone will not be so important to the users and it is the last variables to
consider. It indicates that, if Smartphone provider could provide a Smartphone with a
very good product feature, users will still buy it even its price is higher. Smartphone
provider shouldn’ t focus much on pricing strategy like setting psychological pricing,
because the impact is very least.
 69

A recommendation for future research in this field is to conduct the study with a larger
sample as larger sample will help in analysing the consumer behaviour more
accurately. Also, it would be beneficial to conduct this study over a period of time,
with a longitudinal time horizon, thus discovering trends in attitudes and behaviours.
Finally, consumer attitude could be better understood if other factors which are
driving consumer in purchasing a smartphone are taken into consideration. This would
help to construct a more complete conceptualisation of all factors affecting
consumer’s attitudes towards smartphone industry in India.
 70

INTERNET SITES:

 NDTV Gadgets360.com
 Marketing91.com
 Mi.com
 Samsung.com
 Lenovo.com
 Vivo.com
 Oppo.com
 Wikipedia.org
 Economictimes.com

LITERATURE REVIEW

 Azad, N. and M. Safaei, 2012. The impact of brand value on brand selection:
Case study of mobile phone selection. Management Science Letters, 2(1):
1233-1238.
 Du Plessis, P. J., Rousseau, G. G., and Blem, N. H. Consumer behaviour. A
South African perspective Pretoria, Sigma, 1991.
 Kotler and Armstrong, 2010. Principle of marketing. 3th Edn., Pearson
Education.
 Osman, M., 2012. A study of the trend of Smartphone and its usage behavior in
Malaysia. International Journal on New Computer Architectures and Their
Applications 2(1): 274-285.
 71

Factors affecting smartphone buying behaviour

Name - ______________

GENDER

o Female
o Male

Age- ____
1) Do you use a smartphone?

□ Yes
□ No

2) Which brand of smartphone you are using?

□ XIAOMI
□ SAMSUNG
□ LENOVO /MOTOROLA
□ VIVO
□ OPPO
□ OTHERS

3) Reasons behind purchasing(based on features or specification)

□ camera
□ processor
□ battery life
□ build quality
□ others
 72

4) What is your budget for buying a smartphone?

□ 5000-9999
□ 10000-14999
□ 15000-19999
□ 20000-29999
□ above 30000

5) Have you ever purchased a smartphone because of promotional activity?

□ Yes
□ No

6) According to you which is the best place to buy a smartphone?

□ ONLINE STORE
□ RETAIL STORE

7) Does colour determines your choice?

□ Yes
□ No

8) Which colour attracts you the most?

□ BLACK
□ WHITE
□ ROSE GOLD
□ GOLD
□ OTHER

9) According to you which of the following provides best service?

□ XIAOMI
□ SAMSUNG
 73

□ LENOVO/MOTOROLA
□ VIVO
□ OPPO
□ OTHERS

10) Reason behind buying a smartphone ? (based on usage)

□ CALLS
□ INTERNET SURFFING & MEDIA CONSUMPTION (
WATCHING MOVIES , YOUTUBE VIDEOS)
□ A&B
□ BUSINESS PURPOSE
□ CAMERA
□ OTHERS