10 February 2011

Nokia, Samsung face low-end cell-phone threat from Indian OEMs

Nokia enjoys dominant market share in India, but most low-income Indian mobile users surveyed by Strategy Analytics would prefer their next phone to be made in India, and Indian brands such as Lava, Micromax and Spice will benefit from this preference, according to a report from the Emerging Markets Communications Strategies (EMCS) service of Strategy Analytics. International brands that do not enjoy Nokia’s brand equity — such as vendors Samsung, LG and Sony Ericsson — may have difficulties in the low-end handset market, the firm adds.

The Indian brands have only been on the market for a few years, and collectively they have only gained modest market share. However, 63% of the respondents (primarily living in rural villages and secondary cities with average monthly household income of about $130) say they would prefer their next phone to be manufactured in India, citing the following as key reasons: lower cost and greater value for money, and greater ease of repair and availability of parts.

“National pride is a factor, but when people spend almost 4% of their annual income on a mobile phone, they are going to make purchase decisions based on what will get them the most for their money,” notes Tom Elliott, director of EMCS.

According to Strategy Analytics’ projections, the bulk of new mobile users in India over the next five years will be low-income consumers, particularly in rural areas. “Affordable mobile phones with an appealing set of features will be the key to success in this market,” says Rahul Gupta, EMCS senior analyst in India.

See related items:

Mobile phone market grows 17.9% year-on-year in Q4

Tags: Mobile handset shipments

Visit: www.strategyanalytics.com

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