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The Indian mobile handset market is expected to continue its upward trajectory if a recent report by Frost and Sullivan is to be believed. The report continues to portray the happy sentiments in the mobile industry in the country. India has reached the coveted position of the second largest mobile handset market in the world after China. And it is expected to become even bigger with 208.4 million phones being shipped by 2016 at a CAGR of 11.4% between the period of 2010 2016. For people who were wondering whether the 2G scam resulted in the destruction of small scale players, Frost and Sullivan thinks that, there would be a threefold increase in the number of telecom participants by next year. In short, as of last year India had about 68 mobile handset players, and if the report is to be believed it will go above 200! This would result in further competition and squeezing of profit margins; though I personally wonder on the survival ability of these operators without proper infrastructure and network towers. Operators like Etisalat, Videocon, Uninor have struggled in every way to stamp their authority in the Indian market. Another interesting part of the survey is the increasing use of smartphones by the Indian consumer. While the revenues in the urban areas are reaching saturation point, many mobile manufacturers like Micromax, Karbonn etc. have started manufacturing phones for the rural and semiurban areas too. These phones are replete with all the basic features along with special features like insect repellants etc. As was thought and has been discussed threadbare, the proliferation of Web 2.0 and Internet surfing is expected to rise across the country with the increase in use of smartphones. This is the reason the mobile handset market expects the revenue to rise from US $255 billion to US $350 billion. The smartphone market is expected to grow tenfold to 30 Million units by 2016 from just about Rs 2.9 million units currently. Another important analysis of the survey is the fact that more than 70% of the Indian population still consumes only voice services. But with the onset of 3G and cheaper data usage options, this is expected to change in the near future.
Smartphone Penetration Male Vs Female Among the youth, who have smartphones, only 20 percent comprise of females, again which is one of the lowest in the world. Even our neighbouring country China, has about 40 percent female smartphone users. While in the U.S, female Smartphone users (55 percent) out number their male counterparts (45 percent). Price Most important mobile purchase Driver India is a price conscious country Infact, about 4 out of 10 Indian youths have sighted that as the primary purchase driver, which is more than any other country. Incidentally, in China, Form and shape of the phone takes precedence when choosing a smartphone. Smartphone Market Demand In my opinion, 90 percent of all user want to move to Smartphones, given the kind of features it offers, but smartphones is a much newer phenomenon in India as compared to rest of the world and hence such low penetrations. The sales of smartphones actually saw tremendous growth only in last few months, specifically due to fall in prices of phones. Till start of this year most of the smartphones cost above 15k which was out of budget of most of Indians, especially younger people. But the scenario has changes drastically, thanks to local Indian brands like Micromax, Zen, Maxx and others, who have bought smartphones in every ones reach. Today one can buy a decent smartphone for as low as 3000 rupees (about 60 70 USD). Smartphone Market Potential in India But, still the market potential remains huge 80 percent of Smartphone market is still there for the taking (Imagine the numbers we are talking here). There will be two main factors that will decide how soon the Smartphones proliferate. The price of the handset and cost of Data usage. Apart from handset prices, Telecom Operators have to ensure that cost of data transfer (especially 3G going forward) has to be affordable, otherwise smartphones will always be looked as glorified bulkier feature phones!
Though it has tried its Nokia N8, it hasnt really set the market on fire. At the top end of the market Nokia has had to face the music from Apple and Blackberry while at the lower end Micromax, Lava, Spice and others have been breathing at its neck. As of today, Nokia, GFive, Samsung, Micromax and Spice were the top five mobile handset brands in India.
Would you believe that India now has over 68 mobile handset players, which has nearly doubled in last 3 quarters alone. They newer players now account for 41.2% of the total shipment of the phones. With prices starting from 3,000 for a smartphone and features like longer battery life, dual and triple SIMs, colour display, FM radio etc., who wouldnt think of it as a smart buy? They have targeted the semi urban and rural population fantastically. The likes of Micromax, Karbonn, Maxx and others have have literally changed the mobile play in India with their value-for-money products. The fierce growth in Mobile subscribers can be partially attributed to the low cost mobile brands who have made it affordable to even the lowest strata of the society! Samsung has slipped from its second position in Q2 to be at the third position with an 8.2% market share. But with its slew of tablet products, increasing its manufacturing capacity across China, Vietnam and India, it aims to become the number 1 mobile manufacturing company in the world. The fact that it can easily manufacture displays, processors, memory chips etc. compared to its competitors puts it at a unique advantage. The total number of handsets shipped has increased from 25 million in Q2 to about 40 million in Q3. The final figure for the year is expected to reach about 155 million handsets which include 9 million smartphones. Android OS has gained increasing acceptance in the smartphone market with 19 handsets using it in Q3 compared to just 2 during the same time last year. Smartphones have become a big hit because people are having higher disposable incomes and this has increased their propensity to spend. There is also a very percentage of people who are gadget freaks who are loving this era. The Indian mobile handset market is finally getting competitive with a multitude of players coming up with their products. It would be interesting to see if Nokia still keeps the Leader tag by the end of 2011, or will it buckle up to these fast growing new entrants ?
Low-Cost Android Smartphones Will Seize 80% of Market in Africa, India, and China
The Android OS has taken the smartphone world by storm. In just two years, Android has become the top smartphone OS worldwide. In the US, Android reached #1 in smartphone OS sales because wireless operators that did not carry the iPhone chose Android as their smartphone solution. Yet, the Android handsets that are selling well in the US and Europe are not the same low-cost Android handsets selling elsewhere in the world. New In-Stat (www.in-stat) research forecasts that low-cost Android handsets will reach a penetration rate of 80% of total smartphones in Africa, India, and China by 2015. The low-cost Android smartphone segment is comprised primarily of smartphones released with Android 2.2 or 2.3, since these versions are a good blend of features with modest memory and processor usage. The low-end low-cost smartphones generally stick with EDGE and processors running at 600MHz or lower, because a single-core EDGE chip sells for well under $10. For our purposes, low-cost means smartphones that are $150 or less. Smaller phone manufacturers will sometimes purchase from the gray market where component manufacturers typically don't pay licensing fees, royalties, or taxes for the products they produce. Early competitors in the market include Huawei, MicroMax, Motorola, Samsung, Spice, and ZTE. "All-in-all, the way that Android has spread worldwide, low-cost Android will also spread worldwide. But, where most Android phones are being sold in developed regions of the world, low-cost Android will flourish in emerging areas; however, it will face heavy competition in some regions, says Allen Nogee, Research Director. Samsung has bada, and Nokia is developing Meltemi. In addition, Microsoft has stated that it wants to sell Windows Phone in these developing regions as well and could aggressively lower prices to gain market share. While Google profits in these regions from advertising revenue, Nokia and Samsung benefit the old-fashioned way, by selling hardware. Recent In-Stat research found:
Unit shipments for low-cost Android smartphones will approach 340 million worldwide in 2015. The low-cost Android handset segment will cause some fragmentation in the Android platform. The Ice Cream Sandwich (Android 4.0) step-up in memory and processor demands makes this release less attractive for low-cost Android devices.
Less is More: The Worldwide Emergence of Low-Cost Android Smartphones looks at the history of the low-cost smartphone market, and how we got where we are today. The report looks at Android in-depth and the problems that Google faces as it moves into the low-cost arena. The obstacles are also explored in-detail, as are the markets where low-cost Android smartphones will dominate. Forecasts include:
Smartphone shipments Android smartphone shipments Low-cost Android smartphone shipments by region Bill of materials (BOM) for processor, touchscreen, other components Country-by-country view of the smartphone market
This research is part of In-Stats Smartphones & Handsets service, which provides analysis and forecasts of the market for mobile communications and computing devices, including cell phones, smartphones, MIDs, tablets, mini-notes/netbooks, and notebooks.
How Nokia fell from dominance and got pinned down by competitors
No company sold handsets better than it did. Not in India. It customised products as McDonald's did with aloo tikki and sold them like Lux soaps in neighbourhood stores. This disruptive innovation landed Nokia India almost 60% of the handset market by 2005. The brand became a synonym for the product. Indians didn't go to buy a mobile phone. They went to buy a Nokia. Now many of them don't. Increasingly, Indians go to buy a Nokia and come out with a BlackBerry, Samsung or Micromax. According to the latest 2010 (January-September) report by IDC, a provider of market intelligence, Nokia's market share was 56.2% in 2008 and 32.9% in 2010. The brand has lost its X factor. Nokia India, however, disagrees, claiming its market share in CDMA and GSM handsets today is 52.2%. Technology research firm Gartner puts the 2010 figure at 30.3%. GfK-Nielsen estimates it at 44.8%. Nokia says the IDC report does not include shipments from Nokia's manufacturing facility in Chennai. Also, it says that IDC's statement that most of its shipments from the Chennai plant were exports was "inaccurate and untrue". "IDC and Gartner are reputed global firms which have a history of tracking numbers and trends. We do extensive work on the handset industry and we often use their reports," says Jaideep Ghosh, executive director, KPMG India. But Gautami Srinivasan, 19, hadn't given up Nokia on the basis of IDC or Gartner reports. A Delhi-based beautician, Srinivasan wanted a basic phone. Features didn't matter, price did. What better than a low-end Nokia? "The salesman told me that Micromax Q1 had a dual SIM, loud speakers, expandable memory and an ABCD [Qwerty] keypad. It was cheap but looked expensive," she says. Smartphone users have found different reasons to convert. Sweta Kumar, a 28-year-old consultant, was bored with her toy and wanted to buy a Nokia C7. But she ended up buying a Samsung Ace. The salesman at the multi-brand store pushed Samsung as "the top brand in smartphones" and the "leader in touch technology". What nailed the deal was the phone's Android operating system. "The apps on Android are unmatched. They can even enhance the features of my phone," says Kumar. It helped that at Rs 15,500, Galaxy Ace was Rs 2,500 cheaper than the C7. Beyond the numbers what is significant is the fact that Nokia India market share almost halved at a time when the market grew rapidly. GSM subscribers alone grew five-fold to 543 million between 2006 and 2010. Across all market segments, Nokia is playing catch up from the front. Globally, everyone knows how this came to be. The leaked memo by Nokia's global CEO Stephen Elop made the reason
official: Apple and Android. The first has creamed them in high-end phones by creating a new segment of smartphone users: "the iPhone fan club". The other married utility with entertainment to create an efficient operating platform loaded with mobile apps. But iPhones have a small presence in India and most Android phones still cost more than Rs 10,000. Without its global rivals, Nokia ought to have little reason for worry. They also have a trump card: the first mover advantage. No handset maker knows India better than Nokia. So why did Nokia India lose its stronghold? There is no official note on this one. But the answers are critical. After all, India is Nokia's second-largest market by volume.
Not Made For India 2004. That year Nokia had come up with a dust resistant, anti-slip phone with a torch. The West turned up its nose at this combination of features. But Nokia 1100 proved to be a bestseller in India, with revenues crossing well over $1 billion. The formula for success: technology adapted to local needs. Cut to 2008. The Indian market was abuzz with dual SIM phones. New companies like Spice Mobile and Micromax went on a marketing blitzkrieg. Nokia followers had to wait until August 2010 to get one. By 2010, dual SIMs constituted 38.5% (IDC data) of the handset market in India. Nokia had no finger in the pie. "About 50% of our sales is dual SIM phones. Most of them are non-Nokia brands," says Amit Chopra, owner of a multi-brand retail outlet in east Delhi. Dual SIM is just one of the phenomena that Nokia missed. There are plenty others: low-cost Qwerty phones, long battery life and touch screen smartphones, to name a few. Meanwhile, companies like Karbonn, Micromax and Zen closed in to fill the gaps and increased their collective market share from under 1% to 33.2% in the past two years.
Android has significantly reduced engineering and R&D cost, thus lowering the entry barriers in the OEM space. No wonder the Indian OEMs like Micromax, Lava etc provide tough competition to established players in the Indian market. The semiconductor companies have also enabled this change as they seek to win market share and also be competitive in offering comprehensive solutions to OEMs. Reduction in hardware and semiconductor costs have also helped in bringing down the prices of phones. Apple is credited for being vertically integrated - offering applications and content to its users through the App store and the recently launched iCloud service. Google's App store too experienced tremendous success. This has resulted in a huge disruption in the market allowing users to personalize their phones from lakhs of Applications in the App store. Earlier, users had to depend exclusively on their operator to download Apps/content and this was working nicely for the operators' walled-garden approach. Large global operators on their part, continue to believe in providing quality apps to its subscribers, but with limited success. Traditionally, a phone's life-cycle from concept to realisation has taken roughly 18 to 20 months. Over the past couple of years, the cycle has shrunk by more than half. Newer models hit the market every few months. The drastic reduction in the phone creation cycle has naturally reduced the number of differentiating features among phones. Increasingly product differentiation among the various mobile phones is reducing by the day and the Mobile market is looking more like TV and other consumer electronics market. Challenges/ opportunities and more changes! With most OEMs under severe margin pressure, such a hyper competitive environment is certain to witness more consolidation, allowing only the strong and truly innovative ones to survive. Traditional hardware manufacturers can certainly cause disruption, but the challenging times are here to stay in the OEM space. Operators, on the other hand may eventually have to remain contented being a data-pipe provider (aka landline broadband providers). As the role of mobile devices becomes ever more important in people's lives, the platform powering the devices will play a critical role. Hence, more platforms like Android will emerge, however it is unlikely that Android will be displaced in the near future. RIM (creator of Blackberry) is expected to push its platform aggressively. However, Microsoft's mobile platform may emerge as a dark horse, especially as Nokia has been able to move faster than before.
Another challenge that has come to the fore is patents. Patent and royalties have always been part of the mobile Industry, but only recently has the patent war been so public. In the past most patent disputes have been relatively low key affairs resolved issues behind closed doors. In order to strengthen their position, over the last few quarters companies have made significant investment in acquiring available patents from Nortel and IBM, Google buying Motorola etc. With the on-going cases around the Android platform, and Apple's recent successful patent lawsuit against HTC, it's clear that the patent war is not going to subside anytime soon. It is proven beyond doubt that in such a market, Innovative companies with strong IP portfolio have a distinct edge. Interacting with the mobile through gestures or tracking eye movement may re-define the market. Will Google's future technology - wearable computers bring about the ultimate disruption in the market. Apple has tried to maintain the stickiness quotient with its customers and there-by retaining its loyal customer base, however, will Apple be able surprise its users with innovative offerings every year? Will Apple become a network service provider (MVNO), thereby creating an even tighter vertical integration and provide everything from handsets, network access, content to storage for its users? The current social networking wave would continue, however, the next wave could well be mobile-money or mobile wallet. Will other countries be able to repeat Japan's success in mobile money? Summing-up, the power equation in the mobile industry has shifted away from operators/ OEMs to platform providers. Android and iPhone, considered outsiders from a mobile industry perspective were able to revolutionise the industry and have created immense positive network externalities. Due to the dynamic nature of this industry, anyone within or outside the mobile ecosystem now have an equal chance of changing the mobile Industry. Amidst all the changes and challenges faced by the industry, for the average mobile phone user, the good times are here to stay!
One thing Android owners have over iOS users is tonnes more customization options. This app makes the most of them with a huge variety of ways to personalise your phone, according to Mashable. As well as skins and themes, there's a wealth of widgets for the phone's clock, date display, toggle widgets and weather reports, it says. App: Flipboard For: iOS Ranking: 6 Cost: Free Combining content from websites, blogs and social networks, Flipboard has been a big success story. Available for both the iPhone and the iPad, the "social magazine" is credited for changing the way people access online content, arguably making more of a stir in the digital publishing industry than paid-for, big name launches from established publishers, according to Mashable. App: Snapseed For: iOS Ranking: 7 Cost: $4.99 This post-process photo editing app is available for both the iPhone and the iPad, but on the tablet's larger screen it really shines, according to Mashable. Awarded "iPad App of the Year" by Apple, Snapseed will help you get the most out of your images with auto-enhancement edits, the ability to enhance certain areas, special effect filters and more, it says. App: Path For: iOS Ranking: 8 Cost: Free While major mainstream success is a ways off - although Path has seen about 1.5 million downloads to-date - the relaunch of this smart-journal-come-social-network was well-received, according to Mashable. Offering both a digital diary and a way of sharing with a limited group of close friends, Path appeals to privacy-aware, socially savvy consumers, it says.
App: Instagram For: iOS Ranking: 9 Cost: Free Apple's "iPhone App of the Year" combines creative photography fun with social networking. Its great results and ease of use means it's responsible for too many shots of our breakfasts/cats/boring commutes, according to Mashable. With Instagram you can snap an image, process it with one of the app's awesome filter effects, and then share to not just the Instgram community, but to your friends, family and contacts on wider social networks, it says. App: Stamped For: iOS Ranking: 10 Cost: Free Innovative startup Stamped is a recommendation service with a difference. You can "Stamp" anything from films to food, see your friends' Stamps and build up an archive of things you love, to refer back to later, according to Mashable. Stamped takes the clutter and anonymity out of recommendations, while keeping things private to the wider public, it says. App: Tango For: Windows Phone 7 Ranking: 11 Cost: Free Somewhat bizarrely beating Microsoft-owned Skype to the WP7 platform, Tango allows you to make free phone and video calls over cellular networks and Wi-Fi to anyone who has Tango installed on their smartphone, tablet or PC, according to Mashable. App: Metrotube For: Windows Phone 7 Ranking: 12 Cost: $1.99 for premium version, free version available Although already as popular as the previous "LazyTube" incarnation, Metrotube, re-designed and re-developed for Mango, is an improvement - and so much better than the native YouTube app, according to Mashable. Definitely one to download if you want to catch YouTube clips on your WP7 handset, it says.
App: FeedWorm For: Windows Phone 7 Ranking: 13 Cost: Free While rival reader app Fuse brings good looks, FeedWorm is a no-frills Windows Phone application that syncs with your Google Reader account and makes it very simple to read RSS feeds on your phone, according to Mashable. Offline support and a super-clean interface make it a must-have, it says. App: Bubblegum For: Windows Phone 7 Ranking: 14 Cost: Free While Pictures Lab and Thumba Photo Editor still prove popular on the platform, new-comer bubblegum is the photo app du jour, according to Mashable. Created by Microsoft programmers, bubblegum has all the cool filters and social options iOS and Android users have been enjoying with Instagram, but integrates beautifully into the WP7 platform, it says. App: Mixtapes For: Windows Phone 7 Ranking: 15 Cost: Free Powered by 8tracks, Mixtapes offers free access to millions of songs in thousands of playlists, or to "mixes" made by music lovers all over the world, according to Mashable.The app lets you listen to "what real people are listening to," and is great for both themed listening sessions and music discovery, it says.
Nokia Ruled Indian Mobile Handset Market In 2011; Android Most Preferred OS
Finnish handset giant Nokia retained its leadership position in the Indian mobile handset market with 31 percent share of the market in terms of sales (unit shipments) during 2011, followed by Samsung (with 15 percent share) and Indian manufacturer Micromax (with 5 percent). Additionally, the company was the clear leader in all the mobile handset segments which included smartphones, multi-SIM phones and 3G phones. It had 38 percent market share in the smartphones segment, (followed by Samsung and RIM) and nearly 13 percent market share in the multi-SIM category. The overall India mobile handsets market recorded sales (unit shipments) of 183 million units, according to CyberMedia Research. Heres a look at the different segments of mobile handsets. Smartphones There were 150 smartphone models launched by over 30 vendors in 2011 and the smartphone shipments touched 11.2 million units, a YoY growth of 87 percent. But the most amazing thing was that the share of Android operating system (OS) in the smartphones category grew over 600 percent in 2011 (34 percent share) in comparison to 2010 (9 percent share). Naveen Mishra, Lead Telecoms Analyst, CyberMedia Research said, In 2012, the proportion of smartphones with extended features like NFC and 3D gaming are likely to increase. It will be interesting to see how Microsoft and Nokia take their partnership to the next level with a new range of smart devices based on the Windows 7.5 Mango OS platform. Multi-SIM Multi-SIM handset shipments accounted for 57 percent of the total India mobile handsets market in 2011 (a YoY increase of 61 percent) and this was mainly due to Nokia introducing its dual-SIM phone portfolio in the Indian market in late 2010. Nokia introduced its dual-SIM phone portfolio to the India market in September 2010 and the innovative products in the Finnish vendors portfolio helped Nokia become the market leader in the category. Additionally, the dual-SIM category also extended its presence to the 3G and smartphone (Android) segments in 2011, stated Tarun Pathak, Analyst, Telecoms Practice, CyberMedia Research. 3G Phones Around 250 3G handset models were shipped in 2011 and the total 3G phone shipments stood at 18 million units, a YoY growth of 153 percent. In anticipation of increased 3G data usage among subscribers all the major handset vendors introduced their 3G phone portfolios to the India market during CY 2011. In many respects, 2012 will be a test year for the growth and adoption of 3G handsets and data services in the country and it will be interesting to see how new alliances and offerings emerge from handset vendors, service providers and content developers to target mobile subscribers with innovative device plus data service bundles, stated Naveen Mishra, Lead Telecoms Analyst, CyberMedia Research.
THE NEXT GROWTH ENGINE OF THE DYNAMIC MOBILE ECOSYSTEM: ROBUST GROWTH IN SMARTPHONES AND FEATURE RICH MOBILE HANDSETS OPPORTUNITITES ABOUND