Mobile Phones in India
Content
MOBILE PHONES IN INDIA
Euromonitor International January 2013
MOBILE PHONES IN INDIA
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LIST OF CONTENTS AND TABLES
Headlines ..................................................................................................................................... 1 Trends .......................................................................................................................................... 1 Competitive Landscape ................................................................................................................ 2 Prospects ..................................................................................................................................... 3 Category Data .............................................................................................................................. 4 Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Table 9 Table 10 Table 11 Sales of Mobile Phones: Volume 2006-2011 ............................................... 4 Sales of Mobile Phones: Value 2006-2011 .................................................. 4 Sales of Mobile Phones: % Volume Growth 2006-2011 ............................... 5 Sales of Mobile Phones: % Value Growth 2006-2011 .................................. 5 Mobile Phones Company Shares 2007-2011 ............................................... 5 Mobile Phones Brand Shares 2008-2011..................................................... 6 Sales of Mobile Phones by Distribution Format 2006-2011.......................... 6 Forecast Sales of Mobile Phones: Volume 2011-2016................................. 7 Forecast Sales of Mobile Phones: Value 2011-2016.................................... 7 Forecast Sales of Mobile Phones: % Volume Growth 2011-2016 ................ 7 Forecast Sales of Mobile Phones: % Value Growth 2011-2016 ................... 7
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MOBILE PHONES IN INDIA
HEADLINES
Mobile phones category sees current value growth of 32% to reach Rs659.0 billion in 2011, while volume sales increase 35% Mobile phones category driven by smartphones, which see strong performance in 2011 Smartphones most dynamic with volume growth of 169% in 2011 Average unit price for mobile phones decreases to Rs3,256 in 2011 from Rs3,322 in 2010 Nokia and Samsung maintain leading positions with volume shares of 41% and 18% respectively Mobile phones expected to see 13% volume CAGR over forecast period
TRENDS
Smartphones saw exponential growth in 2011. India already has high penetration of mobile phones. This further increased with the success of smartphones. Smartphones are available in all price segments, making these products accessible to every strata of the population. India being a youth-centric country saw a surge in Android smartphone ownership. Samsung successfully managed to increase sales of smartphones with its wide variety of models. Other companies maintained a higher price for their smartphones. The smartphones category actually picked up due to the launch of the Android operating system. Prior to Android, the Windows Phone operating system and Apple iOS could not increase sales of smartphones to this extent. The ease of the Android platform with its features and availability of many free applications attracted the youth segment towards this operating system, increasing sales of smartphones. Another factor which helped sales of smartphones was the low tariffs offered by telecom service providers. With the availability of 2G services at such low prices, more and more consumers are shifting towards Internet usage on their smartphones. The use of mobile Internet increased substantially in 2011 in India. Increases in disposable income in urban areas also allowed consumers to purchase high end smartphones from Apple and HTC. Manufacturers such as Samsung successfully marketed the smartphones environment and made such units accessible to the masses. The average unit price of mobile phones in 2011 decreased to Rs3,256 in 2011 from Rs3,322 in 2010. The decline in mobile phone prices occurs as soon as a new product is launched. The price drop was also driven by a sharp decline in prices of smartphones. Smartphones in India is dominated by Android with a 50% share, up from 23% the previous year. Android, being an open operating system, is favoured by manufacturers such as Samsung, Micromax and Karbonn Mobiles. Most companies launched a range of new Android-based phones in all price segments in order to target all consumer groups. Android was followed by Nokia’s Symbian, which held a 29% share. Nokia’s sales have declined considerably from a 58% share in 2010. The third most popular operating system was RIM’s Blackberry with 12%. This OS also lost share in 2011 due to occasional service failures and the fact that separate charges for Blackberry services by the telecoms operators are much higher compared with Internet packs which can be used with Android phones. Blackberry OS was followed by the Windows Phone operating system and Apple iOS with shares of 6% and 3% respectively. Android was the most appealing operating system in India due to its low cost usage. The prices of smartphones operating Android declined considerably, and this
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combined with low Internet charges by telecoms providers allowed smartphones to become available to the masses. India is dominated by phone only purchases, which held a share of 98% in 2011. The majority of Indian mobile users buy only the handset from the operator and then obtain a network connection separately from a telecom service provider showroom. Connections from telecoms operators are in two types: pre- or post-paid. Pre-paid is used by the majority of the population use this form of payment, while monthly subscription – or post-paid as it is know in India – accounted for only 2% at the end of the review period. Here the consumer pays the bill once a month for all services used. For the use of smartphones consumers need to activate an Internet connection pack in both pre- and post-paid connections. In case of pre-paid a preassigned usage is bought by the consumer per recharge, or the cost is deducted directly from the available balance in the user’s account. In the case of post -paid, Internet charges are accounted for separately and added to the monthly bill. Even though smartphone sales grew dramatically in 2011, India is still dominated by feature phones. This is because mobile penetration in the country is very high, but smartphone penetration in India remains relatively low in 2011. Consumers are influenced by appearance, features, ease of use and price when purchasing a feature phone. Feature phones are preferred by consumers in rural India due to their ease of use and the purpose of communication being served. Tier-2 and -3 cities and rural areas of India use phones mostly for the purposes of communication, music, radio and games. The concept of performing computing tasks using a phone still has not reached these parts of the country. Also, signal connectivity and internet remains a major issue in villages and hilly terrains which makes smartphones (which require internet for full utilisation) not very useful,. 3G services were launched in India 2010. However, demand for 3G has not yet picked up in India primarily due to its higher cost, and also the lack of ownership of 3G-enabled devices. Consumers in India still predominantly use 2G networks, Wi-Fi and broadband Internet connections. 93% of mobile phone sales in India occur via electronics and appliance specialist retailers which include all chained or independent retailers selling consumer electronics, such as Croma, Ezone and Next Retail, or only mobile phones, such as The Mobile Store, Nokia Store or Samsung Store. This channel of retailing is followed by mixed retailers, Internet retailers and hypermarkets, each having a share of 2% at the end of the review period. Internet retailing in the country picked up due to sites such as Flipkart.com, letsbuy.com and more. These websites generally provide a discount on phones’ MRP, which attracts consumer attention.
COMPETITIVE LANDSCAPE
Nokia and Samsung maintained their shares at 40% and 18%. The share in feature phones for Nokia was 42% and Samsung 18%. In smartphones Nokia’s share was 29% whereas Samsung’s was 21%. Both of these companies have maintained their leading positions for over a decade. Both companies have developed an image as trusted and quality mobile phone manufacturers. Micromax, a domestic mobile handset manufacturer, witnessed growth of three percentage points in share in 2011. The company is known for its long battery life phones. However, over the course of time the company has changed its image to feature-rich budget phones which cater to the masses in the country. In the case of smartphones Samsung witnessed the highest growth of nine percentage points over 2010. This was due to the launch of low- to
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mid-priced smartphones with the Android operating system by the company. The Galaxy range of phones was a huge success. Both feature phones and smartphones are equally dominated by domestic and multinational companies. Among the top five, Nokia and Samsung were followed by Micromax Informatics and Karbonn Mobiles at the end of the review period. Both of the latter two companies are domestic mobile handset producers. The mobile phones from these companies, however, are not considered to be of the same quality as multinationals’ offerings. The brand image of these companies is still that of budget phone producers. As India has a huge rural population base, low-price mobile phones are in high demand. The latest product at the time of writing is the Windows Phone 7.5 operating system Nokia Lumia 800 smartphone. These phones are marketed via television commercials, prominent print advertisements in newspapers, online advertising and coverage by electronic blogs and interviews with the high-level management of these companies. This phone initially did not pick up sales due to its high price, but after slashing the price to Rs23,500, sales picked up. So far the combination of the Microsoft Windows Phone operating system with the most trusted brand of mobile phones in India looks promising. These units, with attractive looks and features such as 16GB internal memory and 8-megapixel cameras are grabbing considerable attention. The USP of the Window’s Phone 7.5 operating system is the integration of social networking sites such as Facebook in its People Hub. Connectivity and networking are currently going hand-in-hand, as a result of which integration of this kind looks very promising for future sales. Samsung launched television commercials targeting the youth with its Samsung Galaxy Y smartphones line. Nokia Lumia launched its “Amazing Everyday” ad campaign to promote its Lumia 800 model, while Apple launched its “It’s the most amazing iPhone yet” ad campaign to promote its iPhone 4S, launched in the last quarter of 2011. Sony Ericsson was taken over as a wholly owned subsidiary of Sony. The mobile company was included in Sony’s broad platform of network -connected consumer electronics products in 2011.
PROSPECTS
The category is expected to see a volume CAGR of 13% over the forecast period, lower than the review period average of 24%. The sale of mobile phones is expected to become steady over the period of next five years. In 2011 mobile phone sales increased exponentially due to the increased use of smartphones in the country. However, this trend is likely to slowing down over the forecast period. Feature phone sales will be driven by demand in semi-urban and rural India. Semi-urban and rural India account for the majority of the consumer base in the country. These places are still technologically backward, and will take time over the forecast period for them to pick up speed and become comparable with urban India. In urban India smartphones are already taking over mobile phones sales, as a result of which the forecast period is expected to see feature phone sales driven by semi-urban and rural Indian demand. The most important factor driving the performance of smartphones over the forecast period will be operating systems apart from Android. Android is currently the leader in terms of growth. However, this will gradually change as consumers are constantly looking for better technology and a change in general. The Windows Phone 7.5 Mango operating system is already gathering notable attention due to its dynamic user interface with social hubs. Sales of smartphones are unlikely to be affected by sales of tablets with cellular functionality over the forecast period, as these tablets are quite large and not as portable as a phone.
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Smartphones are more portable compared with tablets, and hence consumers still prefer smartphones. Sales of smartphones are expected to be affected by devices such as the Samsung Galaxy Note, which is a cross between tablet and smartphone. This device, with its 5.3-inch display, offers the comfort of the larger screen offered by tablets and also serves the purpose of a phone. The Android operating system is expected to dominate in the short term. The launch of Android 4 phones will further fuel the Android category in the near future. The forecast period is expected to see an increase in the Windows Phone 7 and 7.5 Mango operating systems. The user interface is already becoming popular. This is expected to garner substantial amount volume sales over the forecast period. No change in legislation or taxes or other factors likely to affect the mobile phones category were evident in 2011. Unit prices are expected to fall over the forecast period, as launches of new technology will result in older phones becoming cheaper. This will result in the leading players increasing volume sales in order to maintain profits, and developing new designs and products to keep up with growing demand. The smartphones category is expected to drive sales in urban areas, whereas feature phones are expected to drive sales in semi-urban and rural areas. Manufacturers, depending on their target segments, will increase production of the relevant models. Similarly, the stock inventory of wholesalers/distributors and retailers will depend on the type of customer base they are catering to, and hence sales will vary accordingly. Manufacturers, wholesalers/distributors and retailers will change their strategy of production, stock inventory and sales depending on changes in demand. The mobile phones category is extremely dynamic, as a result of which all links in the supply chain will respond accordingly. There were over 650 mobile phones launched in 2011. Most were from domestic players offering low-priced mobile phones. With the availability of so many mobile phones catering to almost all price segments, the performance of each phone is limited, as the replacement cycle of mobile phones has shortened to 16 months. As smartphones are growing in demand, more and more manufacturers are focussing on smartphones.
CATEGORY DATA
Table 1 '000 units 2006 Feature Phones Smartphones Mobile Phones
Source:
Sales of Mobile Phones: Volume 2006-2011
2007 104,617.2 1,808.7 106,426.0
2008 115,602.0 3,212.3 118,814.4
2009 128,780.7 4,535.8 133,316.5
2010 143,976.8 6,350.1 150,326.9
2011 185,387.3 17,000.6 202,387.9
69,008.7 697.0 69,705.7
Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources
Table 2 Rs million
Sales of Mobile Phones: Value 2006-2011
2006 Feature Phones 248,321.9
2007 345,167.5
2008 346,893.3
2009 373,604.1
2010 410,964.5
2011 505,273.2
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Smartphones Mobile Phones
Source:
15,908.0 264,229.9
40,244.0 385,411.5
60,293.0 407,186.3
70,722.3 444,326.5
88,402.9 499,367.5
153,685.3 658,958.5
Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources
Table 3 % volume growth
Sales of Mobile Phones: % Volume Growth 2006-2011
2010/11 Feature Phones Smartphones Mobile Phones
Source:
2006-11 CAGR 21.9 89.4 23.8
2006/11 Total 168.6 2,339.1 190.3
28.8 167.7 34.6
Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources
Table 4
Sales of Mobile Phones: % Value Growth 2006-2011
% current value growth 2010/11 Feature Phones Smartphones Mobile Phones
Source:
2006-11 CAGR 15.3 57.4 20.1
2006/11 Total 103.5 866.1 149.4
22.9 73.8 32.0
Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources
Table 5 % retail volume Company
Mobile Phones Company Shares 2007-2011
2007 68.2 8.9 5.3 8.2 0.7 0.1 0.1 4.6 0.7 0.6 2.7 100.0
2008 65.3 9.8 4.4 5.8 5.4 1.3 0.3 0.1 3.4 0.0 0.6 0.6 2.9 100.0
2009 55.4 16.6 4.0 2.9 2.9 5.7 2.9 1.8 1.4 0.4 0.2 1.0 0.0 0.6 0.6 3.6 100.0
2010 50.4 17.7 5.7 4.8 3.8 5.9 1.9 1.9 1.5 0.5 0.3 0.1 0.0 0.7 0.6 4.0 100.0
2011 40.9 18.4 8.2 6.4 2.9 2.7 1.7 1.4 1.4 1.0 0.4 0.3 0.3 0.1 13.8 100.0
Nokia India Pvt Ltd Samsung India Electronics Ltd Micromax Informatics Karbonn Mobiles Spice Mobility Ltd LG Electronics India Pvt Ltd Sony Ericsson Mobile Communications AB ZTE Corp Huawei Technologies Co Ltd Research in Motion Ltd High Tech Computer Corp Motorola India Pvt Ltd Apple India Pte Ltd Kyocera Wireless India Pantech & Curitel Communications Inc Others Total
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Source:
Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources
Table 6 % retail volume Brand Nokia Samsung Micromax Karbonn Spice LG Sony Ericsson ZTE Huawei Blackberry HTC Motorola iphone Kyocera Pantech Others Total
Source:
Mobile Phones Brand Shares 2008-2011
Company Nokia India Pvt Ltd Samsung India Electronics Ltd Micromax Informatics Karbonn Mobiles Spice Mobility Ltd LG Electronics India Pvt Ltd Sony Ericsson Mobile Communications AB ZTE Corp Huawei Technologies Co Ltd Research in Motion Ltd High Tech Computer Corp Motorola India Pvt Ltd Apple India Pte Ltd Kyocera Wireless India Pantech & Curitel Communications Inc
2008 65.3 9.8 4.4 5.8 5.4 1.3 0.3 0.1 3.4 0.0 0.6 0.6 2.9 100.0
2009 55.4 16.6 4.0 2.9 2.9 5.7 2.9 1.8 1.4 0.4 0.2 1.0 0.0 0.6 0.6 3.6 100.0
2010 50.4 17.7 5.7 4.8 3.8 5.9 1.9 1.9 1.5 0.5 0.3 0.1 0.0 0.7 0.6 4.0 100.0
2011 40.9 18.4 8.2 6.4 2.9 2.7 1.7 1.4 1.4 1.0 0.4 0.3 0.3 0.1 13.8 100.0
Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources
Table 7 % retail volume
Sales of Mobile Phones by Distribution Format 2006-2011
2006 Store-Based Retailing - Grocery Retailers -- Discounters -- Hypermarkets -- Supermarkets - Non-Grocery Retailers -- Electronics and Appliance Specialist Retailers -- Mixed Retailers - Other store-based retailing Non-Store Retailing - Direct Selling - Homeshopping - Internet Retailing Total
Source:
2007 99.8 99.8 99.8
2008 98.5 0.8 0.8 97.8 97.8
2009 98.3 1.0 1.0 97.3 96.3
2010 98.0 2.0 2.0 95.0 93.0
2011 97.9 2.0 2.0 94.8 92.7
99.9 99.9 99.9
0.1 0.1 100.0
0.2 0.2 100.0
1.5 1.5 100.0
1.0 1.7 1.7 100.0
2.0 1.0 2.0 2.0 100.0
2.1 1.1 2.1 2.1 100.0
Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources
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Table 8 '000 units
Forecast Sales of Mobile Phones: Volume 2011-2016
2011 Feature Phones Smartphones Mobile Phones
Source:
2012 232,846.5 21,820.3 254,666.8
2013 229,353.8 27,711.7 257,065.5
2014 194,652.6 93,437.0 288,089.6
2015 154,846.1 186,591.4 341,437.6
2016 118,307.3 256,715.4 375,022.7
185,387.3 17,000.6 202,387.9
Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources
Table 9 Rs million
Forecast Sales of Mobile Phones: Value 2011-2016
2011 Feature Phones Smartphones Mobile Phones
Source:
2012 547,870.2 175,335.1 723,205.2
2013 465,773.7 204,821.4 670,595.1
2014 427,442.9 601,257.9 1,028,70 0.8
2015 284,034.6 979,348.8 1,263,38 3.4
2016 179,647.1 1,033,17 2.9 1,212,82 0.0
505,273.2 153,685.3 658,958.5
Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources
Table 10 % volume growth
Forecast Sales of Mobile Phones: % Volume Growth 2011-2016
2015/16 Feature Phones Smartphones Mobile Phones
Source:
2011-16 CAGR -8.6 72.1 13.1
2011/16 Total -36.2 1,410.0 85.3
-23.6 37.6 9.8
Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources
Table 11
Forecast Sales of Mobile Phones: % Value Growth 2011-2016
% constant value growth 2011-16 CAGR Feature Phones Smartphones Mobile Phones
Source:
2011/16 TOTAL -64.4 572.3 84.1
-18.7 46.4 13.0
Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources
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MOBILE PHONES IN INDIA
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LIST OF CONTENTS AND TABLES
Headlines ..................................................................................................................................... 1 Trends .......................................................................................................................................... 1 Competitive Landscape ................................................................................................................ 2 Prospects ..................................................................................................................................... 3 Category Data .............................................................................................................................. 4 Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Table 9 Table 10 Table 11 Sales of Mobile Phones: Volume 2006-2011 ............................................... 4 Sales of Mobile Phones: Value 2006-2011 .................................................. 4 Sales of Mobile Phones: % Volume Growth 2006-2011 ............................... 5 Sales of Mobile Phones: % Value Growth 2006-2011 .................................. 5 Mobile Phones Company Shares 2007-2011 ............................................... 5 Mobile Phones Brand Shares 2008-2011..................................................... 6 Sales of Mobile Phones by Distribution Format 2006-2011.......................... 6 Forecast Sales of Mobile Phones: Volume 2011-2016................................. 7 Forecast Sales of Mobile Phones: Value 2011-2016.................................... 7 Forecast Sales of Mobile Phones: % Volume Growth 2011-2016 ................ 7 Forecast Sales of Mobile Phones: % Value Growth 2011-2016 ................... 7
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MOBILE PHONES IN INDIA
HEADLINES
Mobile phones category sees current value growth of 32% to reach Rs659.0 billion in 2011, while volume sales increase 35% Mobile phones category driven by smartphones, which see strong performance in 2011 Smartphones most dynamic with volume growth of 169% in 2011 Average unit price for mobile phones decreases to Rs3,256 in 2011 from Rs3,322 in 2010 Nokia and Samsung maintain leading positions with volume shares of 41% and 18% respectively Mobile phones expected to see 13% volume CAGR over forecast period
TRENDS
Smartphones saw exponential growth in 2011. India already has high penetration of mobile phones. This further increased with the success of smartphones. Smartphones are available in all price segments, making these products accessible to every strata of the population. India being a youth-centric country saw a surge in Android smartphone ownership. Samsung successfully managed to increase sales of smartphones with its wide variety of models. Other companies maintained a higher price for their smartphones. The smartphones category actually picked up due to the launch of the Android operating system. Prior to Android, the Windows Phone operating system and Apple iOS could not increase sales of smartphones to this extent. The ease of the Android platform with its features and availability of many free applications attracted the youth segment towards this operating system, increasing sales of smartphones. Another factor which helped sales of smartphones was the low tariffs offered by telecom service providers. With the availability of 2G services at such low prices, more and more consumers are shifting towards Internet usage on their smartphones. The use of mobile Internet increased substantially in 2011 in India. Increases in disposable income in urban areas also allowed consumers to purchase high end smartphones from Apple and HTC. Manufacturers such as Samsung successfully marketed the smartphones environment and made such units accessible to the masses. The average unit price of mobile phones in 2011 decreased to Rs3,256 in 2011 from Rs3,322 in 2010. The decline in mobile phone prices occurs as soon as a new product is launched. The price drop was also driven by a sharp decline in prices of smartphones. Smartphones in India is dominated by Android with a 50% share, up from 23% the previous year. Android, being an open operating system, is favoured by manufacturers such as Samsung, Micromax and Karbonn Mobiles. Most companies launched a range of new Android-based phones in all price segments in order to target all consumer groups. Android was followed by Nokia’s Symbian, which held a 29% share. Nokia’s sales have declined considerably from a 58% share in 2010. The third most popular operating system was RIM’s Blackberry with 12%. This OS also lost share in 2011 due to occasional service failures and the fact that separate charges for Blackberry services by the telecoms operators are much higher compared with Internet packs which can be used with Android phones. Blackberry OS was followed by the Windows Phone operating system and Apple iOS with shares of 6% and 3% respectively. Android was the most appealing operating system in India due to its low cost usage. The prices of smartphones operating Android declined considerably, and this
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combined with low Internet charges by telecoms providers allowed smartphones to become available to the masses. India is dominated by phone only purchases, which held a share of 98% in 2011. The majority of Indian mobile users buy only the handset from the operator and then obtain a network connection separately from a telecom service provider showroom. Connections from telecoms operators are in two types: pre- or post-paid. Pre-paid is used by the majority of the population use this form of payment, while monthly subscription – or post-paid as it is know in India – accounted for only 2% at the end of the review period. Here the consumer pays the bill once a month for all services used. For the use of smartphones consumers need to activate an Internet connection pack in both pre- and post-paid connections. In case of pre-paid a preassigned usage is bought by the consumer per recharge, or the cost is deducted directly from the available balance in the user’s account. In the case of post -paid, Internet charges are accounted for separately and added to the monthly bill. Even though smartphone sales grew dramatically in 2011, India is still dominated by feature phones. This is because mobile penetration in the country is very high, but smartphone penetration in India remains relatively low in 2011. Consumers are influenced by appearance, features, ease of use and price when purchasing a feature phone. Feature phones are preferred by consumers in rural India due to their ease of use and the purpose of communication being served. Tier-2 and -3 cities and rural areas of India use phones mostly for the purposes of communication, music, radio and games. The concept of performing computing tasks using a phone still has not reached these parts of the country. Also, signal connectivity and internet remains a major issue in villages and hilly terrains which makes smartphones (which require internet for full utilisation) not very useful,. 3G services were launched in India 2010. However, demand for 3G has not yet picked up in India primarily due to its higher cost, and also the lack of ownership of 3G-enabled devices. Consumers in India still predominantly use 2G networks, Wi-Fi and broadband Internet connections. 93% of mobile phone sales in India occur via electronics and appliance specialist retailers which include all chained or independent retailers selling consumer electronics, such as Croma, Ezone and Next Retail, or only mobile phones, such as The Mobile Store, Nokia Store or Samsung Store. This channel of retailing is followed by mixed retailers, Internet retailers and hypermarkets, each having a share of 2% at the end of the review period. Internet retailing in the country picked up due to sites such as Flipkart.com, letsbuy.com and more. These websites generally provide a discount on phones’ MRP, which attracts consumer attention.
COMPETITIVE LANDSCAPE
Nokia and Samsung maintained their shares at 40% and 18%. The share in feature phones for Nokia was 42% and Samsung 18%. In smartphones Nokia’s share was 29% whereas Samsung’s was 21%. Both of these companies have maintained their leading positions for over a decade. Both companies have developed an image as trusted and quality mobile phone manufacturers. Micromax, a domestic mobile handset manufacturer, witnessed growth of three percentage points in share in 2011. The company is known for its long battery life phones. However, over the course of time the company has changed its image to feature-rich budget phones which cater to the masses in the country. In the case of smartphones Samsung witnessed the highest growth of nine percentage points over 2010. This was due to the launch of low- to
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mid-priced smartphones with the Android operating system by the company. The Galaxy range of phones was a huge success. Both feature phones and smartphones are equally dominated by domestic and multinational companies. Among the top five, Nokia and Samsung were followed by Micromax Informatics and Karbonn Mobiles at the end of the review period. Both of the latter two companies are domestic mobile handset producers. The mobile phones from these companies, however, are not considered to be of the same quality as multinationals’ offerings. The brand image of these companies is still that of budget phone producers. As India has a huge rural population base, low-price mobile phones are in high demand. The latest product at the time of writing is the Windows Phone 7.5 operating system Nokia Lumia 800 smartphone. These phones are marketed via television commercials, prominent print advertisements in newspapers, online advertising and coverage by electronic blogs and interviews with the high-level management of these companies. This phone initially did not pick up sales due to its high price, but after slashing the price to Rs23,500, sales picked up. So far the combination of the Microsoft Windows Phone operating system with the most trusted brand of mobile phones in India looks promising. These units, with attractive looks and features such as 16GB internal memory and 8-megapixel cameras are grabbing considerable attention. The USP of the Window’s Phone 7.5 operating system is the integration of social networking sites such as Facebook in its People Hub. Connectivity and networking are currently going hand-in-hand, as a result of which integration of this kind looks very promising for future sales. Samsung launched television commercials targeting the youth with its Samsung Galaxy Y smartphones line. Nokia Lumia launched its “Amazing Everyday” ad campaign to promote its Lumia 800 model, while Apple launched its “It’s the most amazing iPhone yet” ad campaign to promote its iPhone 4S, launched in the last quarter of 2011. Sony Ericsson was taken over as a wholly owned subsidiary of Sony. The mobile company was included in Sony’s broad platform of network -connected consumer electronics products in 2011.
PROSPECTS
The category is expected to see a volume CAGR of 13% over the forecast period, lower than the review period average of 24%. The sale of mobile phones is expected to become steady over the period of next five years. In 2011 mobile phone sales increased exponentially due to the increased use of smartphones in the country. However, this trend is likely to slowing down over the forecast period. Feature phone sales will be driven by demand in semi-urban and rural India. Semi-urban and rural India account for the majority of the consumer base in the country. These places are still technologically backward, and will take time over the forecast period for them to pick up speed and become comparable with urban India. In urban India smartphones are already taking over mobile phones sales, as a result of which the forecast period is expected to see feature phone sales driven by semi-urban and rural Indian demand. The most important factor driving the performance of smartphones over the forecast period will be operating systems apart from Android. Android is currently the leader in terms of growth. However, this will gradually change as consumers are constantly looking for better technology and a change in general. The Windows Phone 7.5 Mango operating system is already gathering notable attention due to its dynamic user interface with social hubs. Sales of smartphones are unlikely to be affected by sales of tablets with cellular functionality over the forecast period, as these tablets are quite large and not as portable as a phone.
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Smartphones are more portable compared with tablets, and hence consumers still prefer smartphones. Sales of smartphones are expected to be affected by devices such as the Samsung Galaxy Note, which is a cross between tablet and smartphone. This device, with its 5.3-inch display, offers the comfort of the larger screen offered by tablets and also serves the purpose of a phone. The Android operating system is expected to dominate in the short term. The launch of Android 4 phones will further fuel the Android category in the near future. The forecast period is expected to see an increase in the Windows Phone 7 and 7.5 Mango operating systems. The user interface is already becoming popular. This is expected to garner substantial amount volume sales over the forecast period. No change in legislation or taxes or other factors likely to affect the mobile phones category were evident in 2011. Unit prices are expected to fall over the forecast period, as launches of new technology will result in older phones becoming cheaper. This will result in the leading players increasing volume sales in order to maintain profits, and developing new designs and products to keep up with growing demand. The smartphones category is expected to drive sales in urban areas, whereas feature phones are expected to drive sales in semi-urban and rural areas. Manufacturers, depending on their target segments, will increase production of the relevant models. Similarly, the stock inventory of wholesalers/distributors and retailers will depend on the type of customer base they are catering to, and hence sales will vary accordingly. Manufacturers, wholesalers/distributors and retailers will change their strategy of production, stock inventory and sales depending on changes in demand. The mobile phones category is extremely dynamic, as a result of which all links in the supply chain will respond accordingly. There were over 650 mobile phones launched in 2011. Most were from domestic players offering low-priced mobile phones. With the availability of so many mobile phones catering to almost all price segments, the performance of each phone is limited, as the replacement cycle of mobile phones has shortened to 16 months. As smartphones are growing in demand, more and more manufacturers are focussing on smartphones.
CATEGORY DATA
Table 1 '000 units 2006 Feature Phones Smartphones Mobile Phones
Source:
Sales of Mobile Phones: Volume 2006-2011
2007 104,617.2 1,808.7 106,426.0
2008 115,602.0 3,212.3 118,814.4
2009 128,780.7 4,535.8 133,316.5
2010 143,976.8 6,350.1 150,326.9
2011 185,387.3 17,000.6 202,387.9
69,008.7 697.0 69,705.7
Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources
Table 2 Rs million
Sales of Mobile Phones: Value 2006-2011
2006 Feature Phones 248,321.9
2007 345,167.5
2008 346,893.3
2009 373,604.1
2010 410,964.5
2011 505,273.2
© Euromonitor International
MOBILE PHONES IN INDIA
Passport
5
Smartphones Mobile Phones
Source:
15,908.0 264,229.9
40,244.0 385,411.5
60,293.0 407,186.3
70,722.3 444,326.5
88,402.9 499,367.5
153,685.3 658,958.5
Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources
Table 3 % volume growth
Sales of Mobile Phones: % Volume Growth 2006-2011
2010/11 Feature Phones Smartphones Mobile Phones
Source:
2006-11 CAGR 21.9 89.4 23.8
2006/11 Total 168.6 2,339.1 190.3
28.8 167.7 34.6
Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources
Table 4
Sales of Mobile Phones: % Value Growth 2006-2011
% current value growth 2010/11 Feature Phones Smartphones Mobile Phones
Source:
2006-11 CAGR 15.3 57.4 20.1
2006/11 Total 103.5 866.1 149.4
22.9 73.8 32.0
Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources
Table 5 % retail volume Company
Mobile Phones Company Shares 2007-2011
2007 68.2 8.9 5.3 8.2 0.7 0.1 0.1 4.6 0.7 0.6 2.7 100.0
2008 65.3 9.8 4.4 5.8 5.4 1.3 0.3 0.1 3.4 0.0 0.6 0.6 2.9 100.0
2009 55.4 16.6 4.0 2.9 2.9 5.7 2.9 1.8 1.4 0.4 0.2 1.0 0.0 0.6 0.6 3.6 100.0
2010 50.4 17.7 5.7 4.8 3.8 5.9 1.9 1.9 1.5 0.5 0.3 0.1 0.0 0.7 0.6 4.0 100.0
2011 40.9 18.4 8.2 6.4 2.9 2.7 1.7 1.4 1.4 1.0 0.4 0.3 0.3 0.1 13.8 100.0
Nokia India Pvt Ltd Samsung India Electronics Ltd Micromax Informatics Karbonn Mobiles Spice Mobility Ltd LG Electronics India Pvt Ltd Sony Ericsson Mobile Communications AB ZTE Corp Huawei Technologies Co Ltd Research in Motion Ltd High Tech Computer Corp Motorola India Pvt Ltd Apple India Pte Ltd Kyocera Wireless India Pantech & Curitel Communications Inc Others Total
© Euromonitor International
MOBILE PHONES IN INDIA
Passport
6
Source:
Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources
Table 6 % retail volume Brand Nokia Samsung Micromax Karbonn Spice LG Sony Ericsson ZTE Huawei Blackberry HTC Motorola iphone Kyocera Pantech Others Total
Source:
Mobile Phones Brand Shares 2008-2011
Company Nokia India Pvt Ltd Samsung India Electronics Ltd Micromax Informatics Karbonn Mobiles Spice Mobility Ltd LG Electronics India Pvt Ltd Sony Ericsson Mobile Communications AB ZTE Corp Huawei Technologies Co Ltd Research in Motion Ltd High Tech Computer Corp Motorola India Pvt Ltd Apple India Pte Ltd Kyocera Wireless India Pantech & Curitel Communications Inc
2008 65.3 9.8 4.4 5.8 5.4 1.3 0.3 0.1 3.4 0.0 0.6 0.6 2.9 100.0
2009 55.4 16.6 4.0 2.9 2.9 5.7 2.9 1.8 1.4 0.4 0.2 1.0 0.0 0.6 0.6 3.6 100.0
2010 50.4 17.7 5.7 4.8 3.8 5.9 1.9 1.9 1.5 0.5 0.3 0.1 0.0 0.7 0.6 4.0 100.0
2011 40.9 18.4 8.2 6.4 2.9 2.7 1.7 1.4 1.4 1.0 0.4 0.3 0.3 0.1 13.8 100.0
Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources
Table 7 % retail volume
Sales of Mobile Phones by Distribution Format 2006-2011
2006 Store-Based Retailing - Grocery Retailers -- Discounters -- Hypermarkets -- Supermarkets - Non-Grocery Retailers -- Electronics and Appliance Specialist Retailers -- Mixed Retailers - Other store-based retailing Non-Store Retailing - Direct Selling - Homeshopping - Internet Retailing Total
Source:
2007 99.8 99.8 99.8
2008 98.5 0.8 0.8 97.8 97.8
2009 98.3 1.0 1.0 97.3 96.3
2010 98.0 2.0 2.0 95.0 93.0
2011 97.9 2.0 2.0 94.8 92.7
99.9 99.9 99.9
0.1 0.1 100.0
0.2 0.2 100.0
1.5 1.5 100.0
1.0 1.7 1.7 100.0
2.0 1.0 2.0 2.0 100.0
2.1 1.1 2.1 2.1 100.0
Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources
© Euromonitor International
MOBILE PHONES IN INDIA
Passport
7
Table 8 '000 units
Forecast Sales of Mobile Phones: Volume 2011-2016
2011 Feature Phones Smartphones Mobile Phones
Source:
2012 232,846.5 21,820.3 254,666.8
2013 229,353.8 27,711.7 257,065.5
2014 194,652.6 93,437.0 288,089.6
2015 154,846.1 186,591.4 341,437.6
2016 118,307.3 256,715.4 375,022.7
185,387.3 17,000.6 202,387.9
Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources
Table 9 Rs million
Forecast Sales of Mobile Phones: Value 2011-2016
2011 Feature Phones Smartphones Mobile Phones
Source:
2012 547,870.2 175,335.1 723,205.2
2013 465,773.7 204,821.4 670,595.1
2014 427,442.9 601,257.9 1,028,70 0.8
2015 284,034.6 979,348.8 1,263,38 3.4
2016 179,647.1 1,033,17 2.9 1,212,82 0.0
505,273.2 153,685.3 658,958.5
Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources
Table 10 % volume growth
Forecast Sales of Mobile Phones: % Volume Growth 2011-2016
2015/16 Feature Phones Smartphones Mobile Phones
Source:
2011-16 CAGR -8.6 72.1 13.1
2011/16 Total -36.2 1,410.0 85.3
-23.6 37.6 9.8
Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources
Table 11
Forecast Sales of Mobile Phones: % Value Growth 2011-2016
% constant value growth 2011-16 CAGR Feature Phones Smartphones Mobile Phones
Source:
2011/16 TOTAL -64.4 572.3 84.1
-18.7 46.4 13.0
Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources
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