Mobile phone penetration has peaked out in many countries, although India still has untapped growth potential in that area. The number of active mobile subscribers in the country is about 700 million which represents less than 60% of the total population. Considering the fact that many subscribers have more than one phone, there is no denying that a vast population still doesn’t own a phone. Smartphone penetration is even lower in the country. Various recent estimates have put the number of smartphone users in the country at 44 million. This is 6.3% of the active subscriber population and 3.5% of India’s total population. According to the market research firm IDC, India had 2.5% share of the smartphone world in 2012. The same is predicted to reach 8.5% in 2016 and by that year, India would be the 3rd largest smartphone market. With a fast growing younger demographic and rapidly expanding economy, the country’s smartphone numbers are poised to expand at a much faster pace as compared to rest of the world. Undoubtedly, all global smartphone manufacturers want a piece of the fiercely competitive Indian market. A 2012 report on Indian smartphone business shows the following in terms of the respective market share of big brands. Brand Market Share (%) Samsung 41.6 Nokia 19.2 Research in Motion 12.1 Apple 3.0 HTC, LG and domestic manufacturers like Karbonn, Micromax and Spice are rest of the major players not shown in the table. Now here is how it looks from the mobile ecosystem perspective. Mobile OS Market Share (%) Android 56.4 Symbian 17.4 Research in Motion 12.1 Bada 8.5 iOS 3.0 Windows Mobile 2.6 We have to understand that statistics show only a limited aspect of the smartphone market. Some trends are global and not just India specific. Android has been the leading smartphone software for a while and it seems set to retain that crown for a few years. Symbian is on a terminal decline path globally and Windows Mobile OS is gaining users slowly but steadily. Unless RIM can break some new ground with their upcoming Blackberry 10, the company and its OS may be history in the next couple of years. In terms of handset makers, Samsung has a global lead primarily because of its wide device portfolio. Nokia’s smartphone business has steadily fallen, although recent press releases by the company have claimed a rebound in sales. Migration from Symbian to Windows will help Nokia, but it is still a tough road ahead for the erstwhile largest phone manufacturer of the world. Apple is the only company whose Indian market trends are not a reflection of its worldwide standing. Their iPhone was the unchallenged king of smartphones till about a year ago when Samsung came up with their blockbuster phones. Despite that, Apple has been gaining market share in many countries at the cost of RIM and Nokia. But their story is different in India where the company’s performance has not been able to match up to its big name. Primary reason is the lofty price tag. The 16GB variant of the iPhone 5 costs Rs. 45,000, which comes to over $800 at current currency conversion rates. There are no carrier subsidies or contracts. Most people in this world will not pay that much money for a phone. It is simple, will iPhone be this popular in US if it was sold for $800? The distribution channel is another concern for Apple in India. Till last year, operators like Bharti Airtel were directly selling the phone, but with the latest iPhone, the company has switched to third party distributors. This apparently has assisted Apple in simplifying the logistics of their iPhone brand in India. Although Apple recently launched the iTunes store in India, it is still not permitted by the government to open its own brick and mortar stores in the country. The company has been focusing its energies on China, but currently it does not see similar opportunities in the Indian market. Of course, this is the near term analysis and all this may change in the long term. So what can be done for increasing the smartphone adoption in India? Here are some issues and their solutions – Pricing, Pricing, Pricing!!! – The importance of pricing for a consumer commodity in any part of the world can never be overemphasized. That is the main parameter which captures the mind of a consumer when he is exploring the market. The pricing factor is even more vital for an India consumer. The mobile phone and wireless services market in the country rose rapidly when both became more affordable for an average middle income user. A similar phenomenon has to happen in the smartphone arena too. Any phone manufacturer interested in India has to devise innovative measures to keep the costs low while building a user-friendly and feature packed phone. In some ways, this is already happening. Good smartphones from companies like Samsung and Nokia are available for less than Rs. 10,000. Apart from the phone pricing, affordable 3G and LTE data tariffs would also boost smartphones uptake. Internet connection source – The percentage of computer literate people in India is rising albeit slowly. For getting to the Internet, one requires both a computer and Internet connection. Compare this with a phone, with which the user can get on the Internet with substantially less investment. Obviously, the experience is not the same as compared to a tablet or a laptop, but for basic Internet tasks, smartphones are good enough and they cost substantially less. The average citizen has to recognize that buying a smartphone while is no replacement for a laptop, it can still be helpful as a standalone Internet connection at home. And one does not necessarily need to be computer literate to use a smartphone. Smartphone awareness – This aspect ties into the above factor about how exposure to Internet can help spread smartphone awareness. It is the responsibility of the handset manufacturer and the cellular operator to enlighten people about advantages of a smartphone. Emails, social networking (a.k.a Facebook), maps, weather, news reading, stock market updates, bill payments, travel bookings, gaming, playing music/videos, video chats and online shopping are some of the activities which can be performed on a smartphone with reasonable efficiency. In the end, apart from the cool factor for the younger generation, it will come down to the quality of life. Will smartphones make people more efficient? With all the social media, will it make social life better? Does the idea of video chatting with family and friends overseas sound good? Maps and GPS development in India still have a long way to go, but will getting directions save time and hassle while driving? How about buying a product online which is not available or is expensive in stores? Will smartphones help in making more money in the stock market? Can they help those involved in agriculture? Answers to these questions may vary depending on who you ask but those answers would influence the decision of buying a smartphone. Data Networks – For some mobile phone users, the rationale for not buying a smartphone is slow 3G or data network speeds. This is a chicken and egg situation. Operators ramp up speeds in their network when they see demand and subscribers switch to smartphones if their wireless network supports good bandwidth. However, once the data usage reaches a certain level, this problem automatically takes care of itself. For this, network operators have to ensure that providing a satisfactory quality of service to their existing subscribers will attract more data customers and thus more revenue. Application Ecosystem – Apple’s iOS and Google’s Android have enormous number of applications (apps) which work on their software. Many India specific apps have made their way to both operating systems, but a greater push is required. Bill payments for utilities, online shopping, reading restaurant reviews, checking news updates and sports scores are some of the tasks which can be carried out with phone apps. Growing Economy – India’s economic expansion has slowed down recently, but the nation is still expanding faster than most countries in the world. People have more dispensable income and better exposure to global products. This, along with numerous other benefits of swift economic growth will lead to a jump in smartphone adoption. With all the advantages, smartphones have their own drawbacks. They always lead to an increase in phone bills. Like other technology gadgets, they get obsolete fast and need to be updated every few years. And on top of all this, smartphones can be social nuisance. Isn’t it annoying if a group of friends or family is having dinner and interesting conversation while some in that gathering are busy reading emails or checking in on Facebook with their phones? Smartphones can divert attention when one needs to be focused somewhere else. In the end, the decision to buy a smartphone rests with the customer. In a developing country like India, the challenges faced by smartphones makers are intense. The only question is that can the smartphone manufacturers, wireless operators and government collaborate to put that increasing smartphone penetration on fast track? I think they can and they have to, it is just a matter of time. Smartphones are the inevitable future of mobile phones and that is the way it is going to happen in India too.
Posted on: Fri, 26 Jul 2013 07:45:48 +0000
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