Micromax prepares for a second coming

Once India’s largest smartphone maker by market share, Micromax Informatics is taking a shot at the top slot again, riding recent government initiatives to boost manufacturing and counter cheaper imports from China.

In 2014, Micromax created history when it beat South Korean consumer electronics giant Samsung in total smartphone shipments in the domestic market. But it has lost market share steadily since then, as newer brands especially from China took centre stage with competitive pricing and advanced features.

“Everybody was looking at Chinese phones because they were very competitively priced,” co-founder Rahul Sharma said in an interview.

However, according to Sharma, India’s new production-linked incentive (PLI) scheme will tip the scale back in favour of domestic manufacturers, especially Micromax which still has a strong brand recall.

“I think this is a great cushion that has been provided to all the Indian companies, which will help us to fight these guys,” Sharma added.

Under the PLI scheme, the government will give 4-6% incentive to eligible electronics companies on incremental sales of manufactured goods—mobile phones and electronic components such as printed circuit boards and sensors, among others—for five years. The base year is 2019-20 and the incentives are applicable from 1 August.

In October, the government approved Bhagwati Products, the maker of Micromax phones under the PLI scheme, along with 15 other companies, which include Rising Star, Wistron and Pegatron. Except for Samsung, all the other foreign companies are contract manufacturers for Apple Inc. Samsung and Apple together account for nearly 60% of global revenue for mobile phones.

Sharma says the Indian market needs an Indian brand to take on Chinese smartphone makers, which enjoyed an unfair advantage given the Chinese government’s support through cross-subsidies for decades, making them virtually impossible to challenge.

Micromax will soon launch a new brand called ‘In’. According to Sharma, the company has been working on the new suite of products for 8-9 months. Unlike in the past, Sharma says, Micromax will no longer make low-cost smartphones.

“We will only come out with performance-oriented products. You won’t see phones worth ₹3,000-5,000 from Micromax anymore,” he said. The new phones will be in the range of ₹7,000-10,000 to ₹20,000-25,000 and will be available to customers from early next month, with an entire lineup of ‘In’ branded phones ready by the end of the year. Eventually, the smartphones will be followed by connected devices, through Micromax ACs and other products.