road ahead for indian mobile handset manufacturers

7/31/2019 Road ahead for Indian mobile handset manufacturers

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Road ahead for domestic mobilehandset manufacturers

Group 5

Aishwarya S

Aravind GanesanBhavesh Vijay

Dharmendar S

K Divya

Rajesh Kumar

Rohit Arya

1


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2

Market share in 2004-2005 Market share in 2010-2011

45%

20%

8%

7%

4%

5% 3%

3%3% 2%

Nokia Samsung Micromax RIM

LG GFive Karbonn Spice

Maxx Mobiles Sony Ericsson

Source: Group5, Section:E Intellectual property and News articles

62%

3%

4%

9%

11%

11%

Nokia LG Sony Ericsson Motorola Samsung others

New domestic handset manufacturers have grown

Exceptionally in the last 5 years

Current Domestic handset manufacturers have grown

at 15 Times the rate at which the market has grown

Period Domestic players International players

2008-2011 160.3% 10.79%


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3

2005 2015 2025

Disposable income for products and services using four tieredstructure of markets

Bottom (10lacs)

growth in disposal income for products and services of glocal

market provides immense potential for products targeting this

segment of customers

Source: Group5, Section:E Intellectual property and Mckinsey report

on growth in Indian middle class


4/11

World class quality and features

% of domestic players models-2.82%

Near world class quality andfeatures

Price 7-15k

% of domestic players models-13.2%

Local quality at local prices

Price 2-7k

% of domestic players

models-60.4%

Local

People who canafford only theleast expensiveproducts

Price


5/11

Political Environment

Differential VAT structure

Delay in 2G rollout due to scam

Budget implications

Economic Environment

Deep pocket of foreign players

Increase in disposable income

Fluctuation of exchange rates

Social Environment

Perception of low quality

Increased demand for Internet on the goMobiles gradually becoming style statement

Technological Environment

Inclination towards Smartphone Category

Gradual shift towards 3G

High product and Features variety

5

Institutional Voids

Source:Group5, Section:E Intellectual property


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LeveragingInstitutional

voids

Political

1% Excise duty retained

Tax exemption on R&Dexpenditure increased by 33%

Easy Credit policy due to the

status of infrastructureindustry

Economic Foreign Investments

Sourcing from China at $16

Social Village First Strategy

Innovative marketing strategy

Provided cheap platform forsocial networking

Collaboration with youthcentric brands

Technological

Low cost product innovation

Flexibility towards technology

Phone with built in projectorby Spice

Domestic Players can further leverage their local market

Knowledge and skills to increase penetration

Source:Group5, Section:E Intellectual property


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-20000

2000

4000

6000

800010000

12000

14000

16000

18000

0 2 4 6 8 10

Price

Features

Size of bubble is representative of number of models in that price range

Opportunity

region

Cost leadership is the strategy that will

work under current market conditions

Source: Group5, Section:E Intellectual property and

www.univercell.in

present


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0

1

23

4Buyer power

Supplier power

New EntrantsSubstitutes

Degree of rivalry

Intensity of competition

Weak Strong

Rivalry is moderate, need to stock latest handset to meet end user

Demand, high penetration in rural India increases Competition

and network operators diversifying put pressure on manufactures

But still supplier power is low because of large size of manufacturers

Source :Group5, Section:E Intellectual property and Global top 10

mobile phone companies

Scores: 1=Weak driver . 5=Strong driver


9/11

Market has grown at an excess of 10% in the last 8 years and expected to continue

Major growth drivers are rural markets and replacement handset sales

Products which have features comparable to high end mobiles at lower cost will be the strategy that domestic

handset manufacturers have to implement

Market dynamics provide opportunity for domestic players to leverage institutional voids

Market is still attractive for new entrants

Product and factor market provide evidence of opportunity in local and glocal segments

14

Conclusion

Source: Group5, Section:E Intellectual property

Domestic handset manufacturers need to develop high end mobiles at

lower cost to capture majority market share from current market leaders


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Thank you

road ahead for indian mobile handset manufacturers

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