Thursday, March 7, 2013

How our Phones got Smarter

A visit to any mobile phone store would tell you that the market for phones in India has completely changed from where it was less than a decade ago. For an average Indian consumer, mobile phones have become much more than a means to communicate and I am not even talking about the shift from voice to text and data. These devices have managed to capture the middle class imagination and have attained an aspirational status. Especially the smartphone category. So much so that the erstwhile market leader Nokia had to undergo a massive shift in its product offering to stay competitive. While Apple might have broken into this market first, Samsung really took the people off their feet with its Galaxy offering. Catching up with them are HTC and Blackberry who are fighting back to stay relevant.

Here are 3 possible reasons behind this tectonic shift in the market trends:

1) Social Media on the move:
Let's face it. Mobile browsing and gaming had not been able to do what social media has done to the Indian mobile phone market. People got addicted to Facebook and Gmail so much that they wanted to stay hooked on - every moment. Mobile phones and network providers did everything they could to enable this experience for the users by way of better applications or data plan offerings. While the users were constantly checking their Facebook feeds, receiving emails or chatting over messengers, they got hooked onto blogs, news sites and other social content. More and more people made the shift to mobile platforms and a host of apps ensured that they stayed on.

2) Visibility, Market Reach and Distribution:
They are everywhere. The mobile phone distribution network is matched these days perhaps only by FMCG companies. When Apple moved in first, their phones were not available easily. They stayed with a very limited premium distribution network for a long time. However, Samsung went all out with its reach. Not only did exclusive stores come up, small and big dealers began to stock Samsung phones too. Sony and HTC missed out too in the initial days because of limited reach while Nokia missed out on the product innovation wave. Hence Samsung enjoyed the top position for a good while before HTC and Apple decided to go deeper and broader into the market and gain back some share.

3) Premium pricing and constant innovation:
iPhone's prices were well in tune with their positioning. However, they also began to serve as the anchor point for this new animal in the jungle called smartphones. When other players followed suit with high prices, the product in itself gained a premium status. As soon as smartphones came in 10k to 20k range with almost similar features, people started buying because these prices were much lower than the anchor price set by the first movers and for similar phones. Also, there was always something to look up to. With constant innovation, upgrades and new product offerings, people were kept wanting. They were never satisfied with what they had. While phone makers made such a huge cry about their new launches, users began wanting to stay updated and relevant, even if it came at a price.

The willingness to pay for a mobile phone today is much higher than that for computers, watches, cameras, shoes and other lifestyle accessories. They have also become the first purchase out of the pocket for a lot of youngsters with new jobs. Besides what I talked about, why do you think such is the case?


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