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Looks like a full house now. Or is it an overcrowded space? Yes, these are the questions that analysts tracking the mobile handsets market in India are contemplating over these days.
In the few weeks that went by, four new players entered the market with sufficiently serious intentions. Of them, LG is already a sizable player in the global market, and has also been a major force in the CDMA space.
But more about LG later.
Two nimble contenders from Taiwan–BenQ and DBTel–and a spirited challenger from China–Bird–followed or preceded the foray of the South Korean paw, LG.
Lest someone doubted the seriousness of DBTel, Lewis Tu, director, DBTel, made the company’s stand clear, “We are here, and that too to stay for long. We will launch right from basic to high-end mobiles.”
DBTel has signed up Chennai-based Munoth Communication as a distribution partner. However, the long-term distribution strategies of the company are yet to be out in the open. “We will try to create our own distributor network” Tu threw up more than a hint.
| A Quad Coming | |
| Vendor | The Proposition and the Gameplan |
| LG | The Korean paw is well-entrenched in the CDMA space and is quite capable of snatching away sizable GSM market share. It’s going for direct-to-the-dealer model |
| Bird | China’s largest handset manufacturer is quite capable of lowering entry barriers, and sending the market in a tizzy. It has a tie-up with Agrani for distribution |
| BenQ | The Taiwanese leader can give existing players a tough fight in the mid- and high-end segments. First Mobile India and eSys are its distribution partners |
| DBTel | This Taiwanese player is less organized but quite aggressive. Munoth Communications will look after the company’s distribution for now |
While Tu’s claim to gather 20 percent of the market by 2004 end has naturally been written off by media as a wishful thought, the company has the sale of 4.5 million units worldwide in 2002 to its credit. It expects to sell about six million units this year.
BenQ, a Taiwanese player with more muscle, has rolled out a more transparent roadmap for its launches in India. It has already launched two models and has unveiled plans to launch six more by December 2003, with prices ranging from Rs 5,000 to Rs 15,000.
BenQ plans to invest Rs 10—12 crore to promote the brand and earn some market share. It has appointed First Mobile India as the distributor for south and west regions and eSys for north and east regions. BenQ will also invest in a series of flagship stores housing its entire range of products.
BenQ is hawk-eyeing the middle- and high-end segments and will not hesitate in playing pricing games to usurp some quick slice of the pie. Robert Dung, managing director, BenQ IMEA, while launching the first two handsets, said, “We plan to redefine the middle-high end customer segments in the Indian market. Our phones will be feature-packed and available at competitive prices.”
Bird, China’s largest mobile phone manufacturer, is attacking the entry-level segment. The company has launched its GSM model priced in the sub-Rs 4,000 range. It will launch 10 new handset models by the year end. Needless to say, Bird too has made its intentions clear about playing the pricing game.
Let’s come back to LG, which is clearly the strongest among the four new entrants. As one would have expected, it also has a very clearly defined roadmap for its GSM phones in India. The company has launched two models, targeting the high-end segment, and plans to launch about 12 models by the end of calendar 2004.
LG has decided not to take the distributor route and instead leverage it’s existing chain of dealers across the country. “We are the first to use this direct-to-dealer approach.
While 70—80 percent of the network will be of existing dealers, the balance will comprise new dealers,” Praveen Valecha, product group head–mobile phones, LG, said at the launch.
An official present at the launch of LG’s two handsets ‘hoped’ that the company would grab 15 percent market share in the coming two years. The company projects selling 400,000 handsets during the next calendar.
Even though the cellular services market has been expanding at 80—90 percent on an year-on-year basis and handing over new pastures to graze to handset vendors, shrinking profit margins are going to be a rule rather than an exception.
Yes, the dynamics are going to be vastly different, and while nobody would have expected the honeymoon to last forever, it will be hard–especially for the big guys like Nokia and Samsung–to digest the reality that’s surely and not-so-slowly, checking in.