Over the past few years, the Indian mobile handset space has witnessed an encouraging uptake of smartphones. However, despite an increasing number of consumers shifting to smartphones, a majority of customers in rural and semi rural areas continue to invest in feature phones which offer them mobility at affordable prices. Maxx Mobile, a leading player in the feature phone segment is focusing on cornering a lions’ share in this market.
In an interview with tele.net.in, Krishna Singh, chief operating officer, Maxx Mobile discusses the business opportunities in the Indian mobile market, the challenges facing Maxx Mobile and the company’s future plans.
What are the business opportunities offered by the feature phone market?
Globally, smartphones account for 85 per cent of total mobile phone shipments. Feature phones account for the rest of the 15 per cent market share. However, the market scenario in India is different, with feature phones accounting for 85 per cent share of the market and smartphones making up the remaining 15 per cent. Even though the smartphone segment is witnessing encouraging growth in India, they are yet to impact the popularity and uptake of feature phones.
There continues to be a high demand for feature phones in rural, semi-rural and semi-urban areas. Given the low income level of the majority of consumers in the country, feature phones will continue to witness impressive growth over the next four to five years. However, the industry will witness customers moving away from low-end to middle-and high-end feature phones. In addition, the screen size of feature phones will also increase from the widely available 1.8 inch screen to the larger 2.4-inch, 2.8-inch, 2.5-inch and 4-inch screens.
What are the challenges facing Indian mobile manufacturers?
Currently, the Indian mobile phone market is inundated with low priced devices manufactured in China. These devices offer users multiple features at affordable prices. The 15 per cent of the low-end market for feature phones is accounted for by such devices. Since purchasing power in India is still low, consumers purchase these products which are priced anywhere between Rs 800 and Rs 1,000. However, these products do not offer any warranty and have to be replaced twice or thrice within a year.
Secondly, the government’s move to impose duty on mobile phones priced above Rs 2,000 discourages several Indian mobile handset manufacturers from investing in the industry. Since 70 per cent of all the mobile phones manufactured in the county are priced below Rs 3,000, a lot of players find it difficult to provide users a feature rich mobile phone at affordable prices. In addition, the government also needs to relook at its import and export policy to ensure that the Indian players can source raw material from other countries at reasonable prices.
What is your regulatory wishlist?
Over the last three to four years, the government has taken steps to encourage indigenous manufacturing of mobile phones within the country. In fact, it was industry friendly policies by the government which encouraged companies like ours to install machines, acquire the skill sets required to run a device manufacturing company and explore different operating modules. Going forward, the government could look at supporting Indian manufacturers by lowering the duties imposed on mobile phones.
What is Maxx Mobile’s business strategy?
With the uptake of smartphones, a lot of players are focusing on the smartphone segment. Even though Maxx Mobile has a portfolio of 16 smartphone devices, the company is clearly focused on leading the feature phone market.
The company sees a lot of potential in the feature phone segment with a higher demand for feature phones supporting a larger screen size. With the launch of 500 devices in 2013, we plan to offer customers a wide range of choices within the feature phone segment.
The company has priced its products about Rs 200 lower than the other brands. Maxx Mobile extends consumer support to users through its 1,087 service centres. By March 2014, the company will open up another 913 service centres. Our products are readily available in the market with a distributor network comprising of 200 dealers.
Going forward, the company plans to enter the low-end market Android-based smartphone market. We will launch smartphones priced at Rs 3,200. The objective is to ensure that a Maxx Mobile feature phone user gradually progresses to using an Android phone. Once we manage to obtain a foothold in the low- end smartphone market, we will move up to the middle-end range of smartphones. At the, same time the company is also focusing on the tablet market. A few months ago, we launched a tablet which supports voice calls priced at Rs 4,500.
What are the key markets for the company?
The company’s feature phones, along with the smartphones, have registered encouraging sales in tier I cities such as Mumbai, Calcutta, Chennai and Hyderabad. Now, we are looking to explore business opportunities in the tier II and tier III cities.
What are the company’s future plans?
Currently, the company is selling over 6,00,000 mobile phones per month with an average sales price of Rs 1,500. Out of our total sales figures, 85 per cent of the mobile phones sold are feature phones. We continue to dominate Tier I and Tier II cities with a large number of feature phones being sold in these markets. Going forward, the company is going to make inroads and focus on Tier III and Tier IV markets.