It was an exceptional year for mobile handsets as the country has been adding 6-7 mn every month, and it is increasing. The monthly net adds have also overtaken China, the number one market in terms of mobile base. And all this has happened due to the rapid expansion in terms of new geographies that is fueling mobile growth in the country plus there has been drastic drop in prices of handsets.

In terms of numbers, India's mobile handset market has grown by 50% to touch revenues of Rs 21,434 crore. Last year the figure was at around Rs 14,258 crore and growth was around 62%. This increase in number can be attributed to the replacement market plus new sales happening in newer locations that is getting added up in terms of mobile coverage.

On the distribution front, there has been lot of developments right from opening up of experience stores to availablity of phones in the branded retail shops. In order to increase coverage in rural areas, existing channels have been roped in to provide necessary coverage in terms of distribution. There has been a shift in strategy; CDMA operators are moving towards open market whereas GSM operators are moving towards bundled offering with operators as handset vendors are planning to leverage on all existing resources to tap all their customers.

There has been lot of movement in terms of color and camera phone as these are available as low as Rs 1,234. Advancement in technology in terms of single chipset has also done wonders and phones are now available in Rs 1,300 range. Vendors are looking at niche strategies whereas some of them are aggressively focusing on price to make their products enter the Indian market.

Chinese manufacturers have done well and ZTE has shown the road for others. Jingpeng and Haier have also made good moves whereas Huawei has not been able to leverage on its last year advantage.

The Players
It was an excellent year for Nokia India. The company had a phenomenal growth of around 45.5% and touched revenues of Rs 11,486 crore. In terms of market share, the company had a combined share of 53.6%. The company's success should be attributed to focused product range, competitive pricing and good distribution network which helped in maintaining a good lead vis-a-vis their competitors.

There was a string of innovations in last 12 months from N90 to Nokia 1600. The company introduced forty new models including eleven CDMA models. The models were introduced in all the segments-be it low-end, mid end, and high end. The company introduces its first universal mobile access (UMA) product, the Nokia 6136 and 6086. On top of that it launched the thinnest mobile device-the Nokia 6300. It also expanded its range of music-optimized devices with Nokia 5300 XpressMusic and also widened its color screen product offering for entry users with the launch of Nokia 2310, 2610, and 2626 color display models.

The company is way ahead of its competitors on the distribution front as it has a base of 90,000 retailers, of which around 30,000-35,000 are single brand shops that sell only Nokia products. On the distribution front there was a change in the overall working, with Nokia directly handling around 25% of its retailers and remaining 75% was taken care by Brightpoint and HCL. Not only the distribution, the company has also enhanced its customer care by handling 92% of the complaints within 24 hours.

The localization strategy has really worked for Nokia. The manufacturing facility has delivered 25 mn phones in the very first year. In terms of investment, the company has invested $150 mn and component players are planning to invest $350 mn totaling to $500 mn. The Indian plant was planned for India but is also catering to South East Asia and the Middle East market.

The re-entry of Motorola in a big way helped the company to increase its market share to 11.1% from around 4% in FY 2005-06. The combined revenues are to the tune of Rs 2,387 crore.

Motorola revamped its marketing and distribution strategy for handset sales, bringing new lease of life to the handset device range. It has also improved on its mobile handset market share, thanks to increased number of handset sales and to the overwhelming growth in the telecom sector. In terms of retail outlet, it is way below Nokia in numbers and has around 31,000 retail outlets, and is present in around 250 towns. For GSM, its partnership with Bharti Teletech is bearing fruits and so is the case with Brightpoint. Motorola phones are also available with all the branded retail shops like Pantaloon Group Convergem, Reliance Webstore, Essar's Mobile Store, Subhiksha, Mobile Magic, and Mobile NXT. And all this has given good visibility to the company in terms of uptake.

It has also worked on the concept of exclusive stores and has opened ten Motostores and thirty store-in-store with plans to expand further. For reaching out to smaller towns, tie-ups have been formed with ITC e-Choupal, DSCL Haryali stores, Mobile ME, Kishan Bazar, and Godrej Adhar. Motorola also has plans to tie up with GE Money to provide easy loans to Handset buyers at 0% interest rates. It plans to open 300 collection points for handset servicing with an expected turnaround time of 48 hours.

Motorola continues to revamp its product portfolio in a bid to address larger market segments. Increasing its range of products from mere ten in mid 2005 to thirty products, Motorola now has a product for every price point. It launched its entry level Motofone; GSM model is available for Rs 1,650 and CDMA for Rs 1,299. Apart from the low end it has also introduced a comprehensive range of mid-range and high-range devices. Motorola focused on building an Indian appeal and a strong Indian connection with products targeting the youth.

The huge growth in revenue shows that the company is on its track, but a lot needs to be done if it plans to take head on with Nokia, the market leader.

LG had a dip in the market share as they were unable to consolidate their position in the CDMA space. They have been growing at a fast pace in GSM but the numbers are relatively small. Collectively, the handset revenue was to the tune of Rs 2,348 crore. The company has introduced seven new models, five in the low-end category and two in high-end. It entered the premium lifestyle segment with the launch of its Black Label series phone, the Chocolate phone marking a beginning in the designer phone segment. It achieved a landmark sale of 1 mn GSM phones at the end of 2006. This year LG plans to achieve a sales target of 5 mn GSM handsets. It moved into color LCDs for their phones. With an aim to take the camera and video experience to mass market, LG launched RD 6330 Moviefone. During FY 2006-07 LG CDMA gained immensely owing to its association with Tata Teleservices and Reliance Communication. It also opened LG Shoppe and LG Fone n Fun outlets and is looking forward to having a large presence in CDMA handset space by launching three to four handsets in 2007 with two low-end and two medium end phones. Pans are also to launch 3G phones. The company is manufacturing around 25 lakh phones per month from its Pune factory.

For Sony Ericsson it was a great year as they improved their overall ranking, thanks to the music phone collection. The revenue from handset sales was around Rs 1,386 crore. It achieved the highest growth in handsets in terms of volume globally. Last fiscal, music and imaging was the focus area for Sony Ericsson. It built up on the Walkman phone, which it had introduced in 2005 and also launched high memory phones, which has been a great success. Another area, which it focused on, is imaging and launched phones with unique imaging solutions. It also worked hard on building the brand identity with aggressive advertising and marketing strategy.