New Delhi: Faced with competition from homegrown handset makers offering cheaper models, Nokia India Pvt. Ltd launched three handsets in the €90-180 (Rs5,300-10,600) range in India.
The Nokia C3, Nokia C6 and Nokia E5 handsets aim “to make email, chat and Qwerty devices available at affordable prices to more consumers in the country,” the company said in a release.
The world’s largest handset maker still dominates the Indian market, which is the second biggest one for it after China. Nokia is betting heavily on its wide portfolio of phones and features to hold on to its position as cheaper sets gain in popularity.
“There are reactive elements in the new launches, but this is more of a strategic move to massify the features of the phone beyond voice,” said Anssi Vanjoki, Nokia executive vice-president, markets.
The handset maker also launched a new version of Nokia Messaging Service with free push email service and free instant messaging services in India.
India’s local manufacturers, which entered the market in early 2008, have collectively captured 17.5% of the 100-million handset market at the end of 2009, up from 0.9% at the end of March 2008, data from research and analysis firm IDC said. The number of local makers grew to 28 from five during the period.
Strategic move: Nokia’s Anssi Vanjoki and D. Shivakumar at the launch of three phones in the Rs5,300-10,600 range in New Delhi on Monday. Kamal Kishore/PTI
As per the IDC data, Nokia’s numbers fell from a 56.2% share in 2008 to 54.1% in 2009. LG’s market share dipped from 7.2% to 6.4%, while Samsung Electronics Co. Ltd’s share rose marginally to 9.7% from 9.5%.
Of what IDC refers to as emerging vendors, Gurgaon-based Micromax Informatics Ltd had a share of 4.8% in 2009, making it the fourth largest handset seller. For the three months to September, IDC puts the firm’s market share at 5.7%.
Micromax has a portfolio ranging from Rs1,600 to Rs13,000 with an average selling price of Rs2,550.
The firm says it focuses on segments of the market that have not been looked at by anyone else by offering features such as a phone that also functions as universal remote for devices such as a television. “Around 25% of the one million phones we sell are Qwerty phones, but that is not the primary driver behind the phone. We look at the market as two segments—someone who is new to the mobile handset and someone who is looking to upgrade to a better phone,” says Vikas Jain, business director, Micromax. “Price is the final delight,” he adds. Micromax expects to end this year with around 7-8% market share.
Micromax presently does not manufacture in India, but has tie ups with 11 factories in China and Taiwan that manufacture handsets according to the firm’s specifications, a fact not lost on Nokia’s Vanjoki.
“There is nothing Indian about these firms except maybe the profit they are taking from the Indian consumers. Nokia has invested in R&D, manufacturing, retail and every part of the mobile ecosystem in the country and is more Indian than any of these firms,” he said.
The company is not worried about the competition. “Nokia does not believe in one size fits all and therefore we have a wide range of products,” Vanjoki said.
According to D. Shivakumar, managing director, Nokia India, the company has the ability to weather competitive pressures. “Consumers don’t go for the price. They go for brand, reliability, innovation, service and care as well as form factor,” he said.
Jain of Micromax says the target segments are different.
“They have been in the ecosystem for a long time and have a different perspective which is primarily focused on getting people a mobile phone. We are primarily focused on the subscribers looking to upgrade. Nokia’s biggest sales are of their lowest end phone,” he says.
Nokia has also been facing pressure on its smartphones—phones priced above Rs15,000—from the likes of BlackBerry, HTC and the iPhone. Vanjoki disputes this, saying that they have not just maintained, but also increased their market share in the previous quarter.
Analysts say the company is seeing dwindling margins in a market where the low-end handset market share is being eaten away by the emerging vendors.
“The emerging handset vendors have been able to put tremendous pressure on Nokia in the last two years by offering attractive feature phones at very attractive prices,” says Naveen Mishra, lead analyst for mobile handset research at IDC.