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    Moblie industry095204934 Moblie industry095204934 Document Transcript

    • Strategic Management Report onIndian Mobile Handset Industry
    • MOBILE HANDSET INDUSTRYTable of ContentsIntroduction and Historical background of industry ............................................................................. 2 World Market ........................................................................................................................................ 2 Historical Background of Mobile Industry ............................................................................................ 2 Indian Mobile Market ........................................................................................................................... 3 Market Players ...................................................................................................................................... 3 Latest updates from handset industry ................................................................................................. 4 Future Estimates ................................................................................................................................... 4Analysis of Mobile industry using Porter’s Five Forces Model ............................................................ 5 Supplier power ...................................................................................................................................... 5 Buyer Power .......................................................................................................................................... 6 New Entrants......................................................................................................................................... 8 Substitute ............................................................................................................................................ 10 Rivalry .................................................................................................................................................. 12Life cycle Analysis of Mobile Industry ......................................................................................... 14Conclusion ............................................................................................................................................ 16References ............................................................................................................................................ 17 Page 1 of 17
    • MOBILE HANDSET INDUSTRY INTRODUCTION AND HISTORICAL BACKGROUND OF INDUSTRYWorld Mobile Market Global Mobile handsets market has seen an exponential growth since its firstcommercial launch in 1983. There were 12 million global mobile phone subscribers in 1990and by the end of 2010; the number of mobile phone subscribers reached 5.2 billion.However, the growth had slowed a bit between 2006 and 2009 on the account of economicslowdown and lack of strong telecommunication infrastructure in emerging countries.Smartphone are fast becoming a viable alternative to feature phones, PDAs and laptops,offering phone features such as voice and SMS coupled with mobile internet applications,multimedia functionality, high speed data processing capabilities, and inbuilt GPScapabilities. The smart phone market is currently witnessing high growth due to a host offactors, including lower product cost, improved handset design and functionalities, theexpansion of global mobile email and browsing services, the emergence of 3G and 4Gnetwork technologies, the rising competition among mobile carriers, and the standardizationand upgrades of operating systems. This report will identify the key players in eachapplication market; focusing on their growth strategies and other developments such asgeographic expansion and the development of patented technologies. Finland-based Nokiaheld the maximum share of the global smart phones device market in 2010, followed by theU.S.-based companies “Research in Motion” and “Apple”. Nokia and Symbian commandalmost double the nearest competitor‟s market shares in the devices and OS segmentsrespectively. The emerging companies in these two segments are Samsung (in devicemanufacturing) and Google‟s android (in the OS market).1Historical background of Mobile Industry The first mobile telephone call made from a car occurred in St. Louis, Missouri, USAon June 17, 1946, using the Bell Systems Mobile Telephone Service, but the system wasimpractical from what is considered a portable handset today. The equipment weighed80 pounds (36 kg), and the AT&T service, basically a massive party line, cost $30 USDper month (equal to $337.33 today) plus $.30 to $.40 per local call, equal to $3.37 to $4.5today. Martin Cooper, a Motorola researcher and executive is considered to be the inventorof the first practical mobile phone for handheld use in a non-vehicle setting, after a long raceagainst Bell Labs for the first portable mobile phone. The first commercially automated cellular network (the 1G generation) was launchedin Japan by NTT in 1979, initially in the metropolitan area of Tokyo. The first 1G networklaunched in the USA was Chicago-based Ameritech in 1983 using the MotorolaDynaTAC mobile phone. The first "modern" network technology on digital 2G (second generation) cellulartechnology was launched by Radiolinja (now part of Elisa Group) in 1991 in Finland onthe GSM standard, which also marked the introduction of competition in mobile telecomswhen Radiolinja challenged incumbent Telecom Finland (now part of TeliaSonera) who ran a1G NMT network. Page 2 of 17
    • MOBILE HANDSET INDUSTRY In 2001, the first commercial launch of 3G (Third Generation) was again in Japanby NTT DoCoMo on the WCDMA standard.Indian Mobile Market The first mobile phone was launched in India during 1990s And the first mobile phone company was Nokia. First Mobile service provider was Modi Groups in 1995 and started in Kolkata, somewhere it was signed that mobile service provider was launched in 1994 India has come in a close second in the sale of mobile phones in the year 2006. Chinahas led the race of mobile sales being the highest in the world. In India however the GSMphones rule over the CDMA handsets. Leading the categories are Nokia, Samsung, SonyErickson while Reliance takes a large size share in the corporate segment. The Indian mobilephones market had total revenue of $6.1 billion in 2009, representing a compound annualgrowth rate (CAGR) of 23.1% for the period spanning 2005-2009. In comparison, theChinese market increased with a CAGR of 16.4%, and the Japanese market declined with aCARC of -2.1%, over the same period, to reach respective values of $23.1 billion and $13.2billion in 2009. Market consumption volumes increased with a CAGR of 29.8% between2005 and 2009, to reach a total of 117 million units in 2009. (Source – Data monitor) Cellular phone penetration in India stood at 45 percent in 2009, and the market isentering into a second phase of growth, with replacement sales increasing from 45 percent in2009 to 50 percent of total sales in 2010. Moves to high-speed 3G networks is bringing inmore challenges in terms of innovation and keeping up with fast changing consumer demand.Shortening product life cycle times and declining sales of voice-centric devices will bringchanges to the market during the next five years.2Market Players Recently till 2009, Indian mobile market was dominated by large global players likeNokia, Samsung, LG and Sony Ericsson. According to latest data available, in the financialyear 2009 – 10, the market share of Nokia in India stood at 52.2% versus 64% in the lastfinancial year. Samsung share stood at 17.4% versus 10% last year while LG stood third with5.9% market share. Fall in share of Nokia was mainly due to the entry of many Indianhandset makers whose combined market share was just lurking between 3 to 4% in theprevious financial year has grown up to 14%.Micromax mobiles topped the chart (of Indianmakers) with 4.1% share followed by Spice (3.9%) and Karbonn mobiles (3%). Recententrants such as Lava mobile, Lemon mobiles and Max mobile too are hovering around that1% market share. Success of the new players is mainly attributing to the low price andintroduction of dual sim phones whose demand increases as a result of the fall in call rates.3 However, the Dual sim craze might not last longer as consolidation is expected in theIndian market when maintaining 2-3 Sim cards would prove to be heavy. And not to forgetthe 3G entrance to India last year so people would certainly look for 3G handsets.Entry of New Handset Vendors The growth of mobile handset market can be gauged from the fact that 27 newhandset vendors entered India just in 1 quarter. India also witnessed the launch of high-end Page 3 of 17
    • MOBILE HANDSET INDUSTRYphones as well as entry level phones and Indian mobile users bought nearly 700,000 high-end/smart phones in the April-June quarter (2009).Latest updates from the handset industry- Recently, Mindtree announced the acquisition ($6mn all cash deal) of Kyocera‟s captiveunit in Bangalore, where it would design and build ready-to-brand 3G handsets for telecomservice providers and original equipment manufacturers (OEMs).- Hong-Kong stock exchange-listed China Wireless Technologies‟ Indian subsidiary, Coolpad Communications has announced partnership with Reliance for its dual sim phone, i.e.GSM and CDMA and is setting up its mobile handsets in the Indian market.Cool pad is targeting Rs. 800 crore revenue in the next five years from the Indian market.Future Estimates The markets volume is expected to rise to 206.7 million units by the end of 2014,representing a CAGR of 12.1% for the 2009-2014 periods. The performance of the market isforecast to decelerate, with an anticipated CAGR of 16.3% for the five year period 2009-2014, which is expected to drive the market to a value of $12.9 billion by the end of 2014.Comparatively, the Chinese and Japanese markets will grow with CAGRs of 17.2% and 7.3%respectively, over the same period, to reach respective values of $50.9 billion and $18.8billion in 2014. (Source – Data monitor) Page 4 of 17
    • MOBILE HANDSET INDUSTRY ANALYSIS OF MOBILE INDUSTRY USING PORTERS FIVE FORCES MODEL1. SUPPLIER POWER: Suppliers within the mobile phones market are those entities providing technology,equipment and parts for mobile telephone manufacture. This includes highly specializedsoftware and electronic components. Other suppliers are those providing advertising andmarketing services. Manufacturers are much larger companies than suppliers and thereforethey have the ability to influence supply contracts. For example, Nokia carry out assessmentson their suppliers to make sure they meet standards. However this is partly because marketplayers are so heavily reliant on the quality and efficiency of the software and productsprovided. Moreover, some of the software, such as integrated circuits, can be specific to thecompany, which again increases dependence upon suppliers. Ethics is important in the supplychain too and manufacturers have to be careful who they choose to provide their supplies.Currently there are ethical issues concerning the usage of tantalum purchased from theCongo, as it is believed to help fund civil war in the region. Suppliers provide services to awide range of industries, particularly in the electronics field, and therefore revenuesgenerated from supply to mobile phones are not highly important to them. The same can besaid for marketing and advertising companies that provide services to the mobile market.There has been an increase in raw material prices such as steel in recent years, which couldadversely affect manufacturers‟ margins. The trend for smart phones has strengthenedsupplier power as operating systems such as Windows, RIM, Android, Apple and Symbian isnow an essential component for Smartphone manufacturers. As entry barriers fall in marketsthroughout the world it is likely that profitability is likely to flow away from handsetmanufacturers to manufacturers of key performance enhancing components and modules(both hardware and software). Overall supplier power is moderate.Factors: Strength Attractiveness Low High Parameters 1 2 3 4 5 Differentiated input Medium Forward Integration Low Importance of Very quality/cost high No substitute inputs Medium oligopoly threat Low Player dispensability High Player independence Medium Supplier size Medium Switching costs Medium Page 5 of 17
    • MOBILE HANDSET INDUSTRY 1. Differentiated Input – Since basic type of input (keypad, screen) required for handset manufacturing is more or less same so they don‟t create much of the differentiated input. However for high end premium mobile phones, material and technology required is of very different type for different manufacturer. Companies could switch suppliers for non critical components but are closely tied to them for critical components and sub-systems. Thus strength of this parameter is medium and attractiveness of industry is given 4 points. 2. Forward Integration – Suppliers do not pose any credible threat of forward integration even though they are outsourced. Thus strength is low and rating is 4 points. 3. Importance of quality/cost – Due to increased competition in the industry, quality is becoming a necessity for any player to survive. Indian people are becoming more quality conscious day by day and they want good quality phone at low cost. Thus strength of this factor is high and it can decrease the attractiveness of the industry hence rating given is 2 points. 4. No Substitute inputs – Due to availability of large number of substitute supplier for non critical components, the strength of this factor is low and attractiveness rating is 5. 5. Supplier Size - Manufacturers are much larger companies than suppliers and therefore they have the ability to influence supply contracts. For example, Nokia carry out assessments on their suppliers to make sure they meet standards. . However this is partly because market players are so heavily reliant on the quality and efficiency of the software and products provided. Moreover, some of the software, such as integrated circuits, can be specific to the company, which again increases dependence upon suppliers. Thus the strength of this medium and rating given is 3. 6. Switching Costs – Since requirement of high quality supplies and huge volume requirement, it is very tough for any manufacturer to switch its suppliers easily. Also due to requirement of specific technology for particular handset, switching costs are very high. Thus the strength is medium and attractiveness rating given is 2. Drivers of supplier power Differentiated… 5 switching costs 4 Forward… 3 2 supplier size 1 Importance of… 0 Series 1 player… No substitute… player… oligoply threat2. BUYER POWER: Buyers in the market fall into two categories. Firstly, independent retail outlets and big storeretailers, purchase handsets to sell on to end-users. Mobile network operators constitute the othersection of buyers in the market, although some of these operators are vertically integrated and havetheir own retail outlets. There are a small number of large mobile network operators, giving themsome negotiation muscle when bidding for contracts with market players. However it is necessary forall buyers to stock the latest innovative products if they want to meet end-user demand and thisdiminishes their strength in the supply chain. Both: network operators and retailers are occasionallyable to win exclusive deals with manufacturers. Overall buyer power is moderate. Page 6 of 17
    • MOBILE HANDSET INDUSTRYFactors: Attractiveness Strength Low High Parameters 1 2 3 4 5 Backward Integration Low Buyer Independence Medium Buyer size High Financial Muscle High Low cost switching High Oligopsony Threat Less Price Sensitivity Medium Product Dispensability Medium Tendency to switch High Undifferentiated Product Medium 1. Buyer Size – Since there are so many small and different buyers, they are source of attractiveness for new players. Thus the strength is high and rating given is 5. 2. Low cost switching – Switching cost is very low for buyers as there are so many different handsets available at different prices. Thus the buyers have power to switch easily. Hence the strength of this factor is high and it decreases the attractiveness to some extent. However due to brand loyalty they might not switch easily which result in rating of 2. 3. Price sensitivity – Since India is growing at an average rate of 8% since last decade, income level has gone significantly. Lifestyle of people has changed to a great extent. Status is one of the desirable factors in the handset. But still much of Indian population lives in rural and semi-urban population, people are somewhat price sensitive. Thus the strength of this factor is medium and rating given is 3. 4. Tendency to switch – Since the switching cost is not so high, people tend to switch mobile phone if they are unsatisfied with the current phone or if some other phone with better feature is launched. Thus the strength of this factor is high and rating given is 2 as buyer has some power. 5. Undifferentiated product – Majority of mobile phone provide all the basic facilities like calling, texting, alarm, calendar, camera, radio etc. Thus point of differentiation lies mainly in price and other special feature like GPS, Music player quality, WiFi etc. Thus if we look across different segments, we can see many differentiated product and also some phone are highly differentiated. Thus the strength of this factor is medium and rating given it 3. 6. Financial Muscle – Since the wholesale buyers and distributors are in good financial position, mobile manufacturer need not worry much about the business with them. Hence the strength of this factor is medium and rating given is 5. 7. Background Integration – Since it requires very high investments and high expertise, small retailers and distributor cannot background integrate easily. Also as of now we have not seen any backward integration. Thus the strength is low and rating given is 4. Page 7 of 17
    • MOBILE HANDSET INDUSTRY Drivers of buyer power Backward integration 5 price 4 Buyer sensitivity 3 independe… 2 1 0 Series 1 Oligopsony Buyer size threat Low cost Financial switching muscle3. NEW ENTRANTS: The overall threat to mobile handset industry due to new entrants is moderate. Thereason for moderate risk is due to the fact that companies in electronic equipmentmanufacturing can easily venture into mobile industry owing to similar technology. Examplesare success of Blackberry, HTC and other smart phones. All of the established mobile phonemanufacturers are now following suit by launching their own smart phones, which suggeststhat this section of the market is likely to see significant growth over the next few years,luring newcomers with revenue perspective.Problems:1. For entirely new entrants, the scenario is difficult because they have to compete in technology with already established big players like Nokia, Samsung, and Motorola etc. They will require huge capital outlay not only in production facilities but also in research and development.2. There are stringent laws relating to science-based regulation and the adoption of emission guidance by the International Commission on Non-Ionizing Radiation. Furthermore mobile manufacture is closely monitored with studies being conducted on the possible side effects of electromagnetic fields produced by mobile phones.3. Though buyers may have good disposable income and youngsters may have fad to change their handsets very frequently but they rely on established players who in recent times are coming up with new, fancy and cost effective models catering to the needs of the consumers. So new entrant will find it difficult to establish itself and compete at the same level of innovation by creating not only a share of market but also share of mind.Statistics: In Indian handset industry, the number of new entrants has almost doubled to 68 andmarket share which they now hold is around 45 percent. New entrants include Indianmanufacturers like micromax, spice,Karbonn, Chinese player Bird, Taiwan-based DBTel andTaiwan-based BenQ etc. Page 8 of 17
    • MOBILE HANDSET INDUSTRYBrand Percent shareNokia 52Sony Ericsson 8Samsung 6Other(legal) 7Gray 27Factors: Attractiveness Strength Low High 1 2 3 4 5 Market Growth High cost switching Low Fixed Cost Low Regulation Low Access to channel of Distributions Moderate Other Brands Strong Product Undifferentiated Access to material Easy Scaling Unimportant1. Market growth: The mobile handset market is growing at a very fast pace. “India‟smobile handset market touched 100.9 million units in the year ended June 2009, recording agrowth of 6.7% from 94.6 million units in the previous year ended June 2008, according toIDC India.” Figure: India Quarterly Mobile Handsets Market (Source:IDCindia)2. Low cost switching: Since there are huge number of mobile handset providers withsimilar features and similar price range, it poses threat with new entrants as market share ofexisting players might come down. Page 9 of 17
    • MOBILE HANDSET INDUSTRY3. Little Regulation: Very few regulations like “International Commission on Non-Ionizing Radiation” check that harmful radiations and environmental norms are followed bythe manufacturers thus making their entries easy.4. Undifferentiated product: Since products offered by this large gamut of providersdiffer very less in terms of features, style, price and durability, they make entry of newplayers fancy and attractive.5. Weak Brands: If we look at the mobile handset industry, brands are very strong.Nokia, Samsung, LG, Motorola etc command respect because of their quality, affordableprices, availability and variety thereby making new entrants think twice before entering thisarena.6. Low Fixed costs: Though fixed costs are low in setting up of the industry butcontinuous investment in R&D and other marketing related expenses make it difficult forentrants to invest freely or venture into mobile handset industry.7. Distribution Accessible: it is quite attractive because number of mobile dealers inIndia had grown manifolds. Opening of stores like „Mobile store‟, „Nokia priority centre‟ andother stores owned by RPG and Virgin makes it attractive for entrants because they do notneed to setup their own distribution centres. Factors Influencing entry of new players Market Growth 5 Scaling 4 Switching Cost 3 2 Supplier 1 Fixed Cost 0 Series 1 UndifferentiatedPr Regulation oduct Distribution Brands channel 4. SUBSTITUTE: Threat from substitutes is very low because potential substitutes are landlines, e-mail, networking sites, messengers (skype, gtalk, yahoo messenger) etc. But it can be said that threat from such substitutes is quite low. Landline, once dominant player is in declining stage. E-mails and networking sites can never be perfect substitutes for mobile phones. Many mobiles now provide their users with the internet, TV, GPS and mp3 functions. With these features in offering and complete mobility at affordable prices, any significant threat from the substitutes is ruled out. Page 10 of 17
    • MOBILE HANDSET INDUSTRYStatistics: Telephone Subscribers (Wireless and Landline): 787.28 million (Dec 2010) Land Lines: 35.09 million (Dec 2010) Cell phones: 752.19 million (Dec 2010 Annual Cell phone Addition: 227.04 million (Dec 2009 - 2010) Monthly Cell phone Addition: 22.62 million (Dec 2010) It can be clearly seen that number of cell phone users is far above than that of land lineusers. Also looking at the number of monthly cell phone addition, it is quite close to thenumber of land line users. It can be conveniently concluded that there is no serious threatfrom landline which is close substitute of mobile users.Factors: Strength Attractiveness Low High 1 2 3 4 5 Availability of close substitutes low Switching Cost low Beneficial alternative not enough1. Availability of close substitutes: This poses a very low threat because advantagesoffered by mobile phones include voice services at affordable rates, complete mobility andvalue added services. This list not being exhaustive clearly surpasses any other substitute.2. Switching Cost: As far as switching costs are concerned, they are low but lack ofpotential substitute dismisses the threat that could have cropped because of low switchingcost.3. Beneficial alternative: There may be services offered on internet which cannot beavailed on mobile phones but it can never replace mobile phones. Recently i-pad and palmcomputers have come up but they are very costly and at the same time not convenient tocarry. Landlines on other hand do not offer any other service apart from voice calling whichis not what generation look out for. Factors influencing the threat of substitutes Close alternative 5 3 1 -1 Series 1 Beneficial Switching alternative cost Page 11 of 17
    • MOBILE HANDSET INDUSTRY5. RIVALRY: This market is mostly dominated by a few large well known companies such as LG,Samsung, Nokia and Motorola, which intensifies competition. Also present in the market,however, is a second tier of small manufacturers with phones that are targeted towards nichemarkets or produced for specific regions. Market penetration is high and in such conditionswell established mobile phone firms, such as Motorola, have responded by creating growthopportunities through a high generation of replacement handset sales.Statistics:Based on IDC India, Nokias market share dropped significantly to 36 percent in the secondquarter, from 56.8 percent in the same quarter last year and further drop to 31.5 percent in thethird quarter, reflecting the growing share of Chinese and Indian vendors of low-end mobilephones. Source Date Nokia SAMSUNG LG ZTE Apple RIM Others IDC Q4/2010 30.8% 20.1% 7.6% 4.2% 4.0% 33.2% Gartner Q3/2010 28.2% 17.2% 6.6% 3.2% 2.9% 33.0%Factors: Attractiveness Strength Low High 1 2 3 4 5 No of Competitors High Industry Growth High Fixed Cost Low Differentiation Low Switching Cost Low Competitor Size Important Storage cost low Exit Barrier High Expansion Easy1. Number of Competitors: penetrated by large number of brands, still it poses littlethreat because each has their own production facilities, distribution centers and clientele basewhich it needs to retain by investing regularly in R&D which till now companies have beenable to do so. With growing market if competitors are close competitors, they still have lot ofuntapped potential in terms of rural market.2. Industry growth: Mobile handset industry is growing very fast with giving lot ofopportunities to not only existing players but also new entrants and thus this is an area of highopportunity and threat at the same time. Page 12 of 17
    • MOBILE HANDSET INDUSTRYIndia Mobiles Phones Market value forecast(Source: Data Monitor)3. Fixed cost: the fixed cost involved in this industry is not very high but still it is highon attractive parameter because this is an advantage to all the players who have to spend highon R&D and marketing and building efficient supply chain.4. Differentiation: Apart from physical touch and few advantages here and there, most ofthe features offered by handset providers are almost similar. It makes very necessary forcompanies to invest a lot of time, money and resources in it to make their products stand outfrom other players offerings.5. Switching Cost: it is costing very less to customers to change their handsets. Alsoofferings of different players with similar features fall almost in similar price range. Thus itmakes difficult for companies to retain customers who are not loyal by constantly offeringnew products.6. Competitor size: very important factor as established players who are very big in sizeare able to price their quality products at low price.7. Exit Barrier: with lot of investment made in set up, R&D and marketing, lot of thingsare at stake and it becomes difficult for companies to exit from the industry so easily. Drivers of degree of rivalry No. of competitors 5 industry expansion 4 growth 3 2 exit barrier 1 fixed cost 0 Series 1 differentiatio storage cost n competitor switching size cost Page 13 of 17
    • MOBILE HANDSET INDUSTRY LIFE CYCLE ANALYSIS OF MOBILE INDUSTRYMobile handset industry can be classified to be one in growth stage. Some of the general characteristics of growth stage are: 1. Rapid climb in sales. 2. Early adopters like the product and additional consumers start buying it. 3. New competitors enter, attracted by the opportunities. 4. Sales rise much faster than promotional expenditures, causing a welcome decline in the promotion-sales ratio.Now some of the strategies adopted by firms to sustain rapid market growth are: 1. It improves product quality and adds new product features and improved styling. 2. It adds new models and flanker products. 3. It enters new market segments. 4. It increases its distribution coverage and enters new distribution channels. 5. It shifts from product-awareness advertising to product-preference advertising. 6. It lowers prices to attract the next layer of price-sensitive buyers.The mobile handset industry in India is in growth stage which can be attributed to the reasonsbelow mentioned: 1. Growth story of Mobile industry in India can be summarized in following manner, a. Market volume: The Indian mobile phones market grew by 27.7% in 2009 to reach a volume of 117 million units. a. Market volume forecast: In 2014, the Indian mobile phones market is forecast to have a volume of 206.7 million units, an increase of 76.7% since 2009. India mobile phones market value forecast: $ million, 2009–1 India mobile phones market volume forecast (source:datamonitor) Page 14 of 17
    • MOBILE HANDSET INDUSTRY The Indian mobile phone market has experienced rapid, double-digit growth in recent years and although deceleration is expected towards 2014, further double-digit growth is forecast. 2. Another characteristic of mature industry is entering of new competitors attracted by opportunities. As have been shown in previous point market forecast for mobile industry is very bright and in recent past many new players have emerged. Some of the emerging Indian player are Maxmobile, Karbonn, spice etc. India mobile phones market segmentation by value is,Category % shareChina 43.7Japan 25India 11.5South Korea 9.0Rest of Asia-Pacific 10.7 (Source: Datamonitor) 3. Some of the emerging opportunities which will be leveraged and bring huge revenues to the firm are, a. An area of potential growth is mobile banking (m-banking). There are more than 600 million users of mobile phones in India but only 40 percent of them have bank accounts and less than 10 percent of those use even net banking. But this is an area of huge potential and will bring revolution not only in banking but also mobile industry. b. Smartphone sales in the country accounted for 5.2% of total handset sales in the first quarter of 2010. Gartner projects a growth of 18% in Smartphone sales by 2014. Also these smart phones or business phones have huge potential where executives and working professionals want to keep themselves online and best way to do so is through mobile. Blackberry, Nokia, and HTC are important players in this sector. c. 3G is another big revolution bound to happen in India with its emergence 3G enabled devices will be in huge demand. This will improve video quality and internet speed. As per reports by Gartner 3G subscribers will grow manifolds within next 3 years. d. Lower tariff plans and value added services also contribute a lot in replacing not only landline but also forcing each member in a family to own a mobile phone for self. 24 hours connectivity is thing of the present and with mobiles penetrating in middle class households like anything, this market will grow as rural sector ia still largely untouched which has huge untapped potential. e. Mobile applications form yet another important promising sector. More than 1,000 developers in India create mobile apps such as games, social networking apps, and utility apps. However, these apps are not India-specific and cater to a global audience. With 3G and improved connectivity, India‟s consumers will be able to take advantage of the home grown mobile apps. 4. The strategies adopted by firms in growth phase have been mentioned above and on close observation it can be seen that similar strategies are being adopted by players in the mobile industry, Page 15 of 17
    • MOBILE HANDSET INDUSTRY a. Recently it has been observed that all players, big or small are introducing products with features as innovative as they can to attract customers who want product differentiation. Example is mobile phone for elders with enlarged keys so that they do not have any problem visually locating keys. Another example is of dual sim phones. b. Not only new features are being added but also companies are coming up with new models as fast as they can. These phones range from slider to flap to classic phones offering variety at reasonable price range. c. Also it is observed that the advertisements of mobile phones earlier used to be more of introducing their products. Recently trends have changed. Advertisements now focus more on features that are being offered by the companies to lure the customers. d. If prices of the products are talked about, then clearly there is a kind of price war in this industry. Phones have come down in the buying range with amazing features and looks. Blackberry phones are now available in the range of Rs. 10000-12000. Prices have been brought down drastically so that products can be made available to different segment of people who were till now never touched.Conclusion:With a large percentage of its population being young, India is expected to top the worldsyouth mobile market by 2011. For the techno savvy youth, a phone should combine coollooks with utility. Considering the various factors driving the growth of the mobile market inIndia, the young, dynamic, and developing mobile market will offer great opportunities andchallenges for local as well as international players. The recent enormous growth of theindustry has attracted many players. Currently, there are 88 companies in India which aremanufacturing mobile handsets. Some of the main companies are Airfone, Beetel, Maxx,Lava, Olive, Acer, CAPLIGHT, Airnet, etc. This is supporting the increased teledensity inIndia. International studies have proven that with every 1 percent increase of teledensity,there is an increase of 3 percent in the GDP of that country. Thus, this booming mobileindustry is now playing an active part to make India a strong economy of the world. Page 16 of 17
    • MOBILE HANDSET INDUSTRYReferences:(n.d.). Retrieved march 2, 2011, from http://www.gartner.com/it/page.jsp?id=1412313handset market-gsm and cdma handset dual sim phones. (n.d.). Retrieved March 5, 2011, fromhttp://articles.economictimes.indiatimes.com/2010-06-22/news/27580838_1_handset-market-gsm-and-cdma-handset-dual-sim-phonesReport: Global phone and smart phone Market. (n.d.). Retrieved February 27, 2011, fromhttp://www.the-infoshop.com/report/mama170754-mobile-ph-smartph.html Page 17 of 17