Big global brands will continue to face competition

Mobile device sales in India are forecast to reach 231 million units in 2012, against 213 million units in 2011, an increase of 8.5 per cent, according to Gartner, a leading IT research and advisory company. The mobile handset market is expected to show steady growth through 2015 when end-user sales will surpass 322 million units.

According to Gartner, the Indian mobile device market is competitive with more than 150 manufacturers selling devices to consumers. While most of the local and Chinese manufacturers have remained focussed on low-cost devices, some manufacturers have built capabilities to deliver smartphone devices and even ventured into other global markets.

“The big global brands will continue to face competition from local and Chinese brands as some of these brands are building capabilities to compete at a larger level covering broader consumer segment,” said Anshul Gupta, principal research analyst, Gartner. “G'five, Karbonn Mobile and Micromax occupied third, fourth and fifth positions after Nokia and Samsung in the third quarter.” India accounts for about 12 per cent of worldwide sales and is an important market for device manufacturers, with aspirations to grow their global market share. Due to its sheer size and open market (mobile devices being sold independently of cellular connection), it has attracted many global mobile device manufacturers. The market is also supported by many local manufacturers. Mobile manufacturers are also competing against many brands in the black market who are selling without invoices.

“The entry of Indian mobile handset players focussing on low-end, value conscious consumers has intensified competition in the mobile device market. The average selling price of a mobile device is about $45 with 75 per cent of devices sold costing below $75,” said Mr. Gupta. “Smartphone sales in India made up 6 per cent of total device sales in the first three quarters of 2011, and this share is expected to increase to 8 per cent in 2012.”

With the growing influence of local handset players in the low-end segment, the traditionally stronger, big global players have had their position weakened. At the same time, the mid- to high-end market is getting increasingly competitive too, with greater focus from global players on the Indian market, and the launch of competitively-priced midrange and high-end devices.

The Indian mobile device market is driven by the lowest call rates in the world and dominated by low-cost devices, which account for 75 per cent of overall sales in India in 2011, said Gartner.

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