Strategies for Indian brands in the mobile handset market

Abstract

The wireless telephony subscribers in India were around 631million in June 2010 according to TRAI registering a robust growth of 2.91% over the previous month.The Indian customer has sufficient choice among service providers given the fresh licenses awarded in 2G and 3G spectrum. However in the backdrop of the mobile revolution in India another industry has been reaping the biggest dividend which belongs to the mobile handset manufacturers. In the current year this industry may record sales of 138.6 million growing at 18.5% over the previous yearii. The huge opportunities for rapid growth saw as many as 15 brands vying for a significant market share led by Nokia followed by Samsung, LG etc. An important phenomenon taking place in this industry is the growth of India-based handset manufacturers. Currently they have around 14% market share and are growing at a 5-7% per yeariii. These Indian brands like those of Micromax, MAXX, Karbonn, Loop, Spice etc have been especially present in the low-end segment priced between Rs. 1000 to 6000. The presence of multiple Indian brands in this segment has substantially weakened the global brands forcing them to look for mid and high-end categories. The intent of the project was to study the reasons behind the sudden growth of Indian brands. The various strategies adapted by these brands as they fight within themselves and with the foreign giants were also studied. The significance of rural India in the evolution of the industry, the new developments in the field of handset based Services and other VAS, the role played by the replacement and the grey markets have also been covered. The threats that are being faced by these players currently from various sources including the incumbent market leaders like Nokia are analyzed. Based on the primary field study and the secondary sources along with the analysis of the similar markets in India and abroad the project has specified few recommendations for the Indian brands in order to continue to compete in the Indian markets.