One of the most salient features of the mobile telephony market saga in India has been the rise of home-grown handset vendors and brands. These vendors have helped accelerate the adoption and usage of mobile phones, especially among consumers in smaller towns and rural areas.
The USP of these home-grown vendors has been their ability to pack higher-end features in handsets that sell at much lower price points. Of course, they are able to do so because of their relatively low overheads, compared to the larger global vendors. And the not-so-brand-conscious among the consumers can willingly see the attractiveness of such offerings.
Yet, the rise of the home-grown vendors has been so phenomenally sudden that it came as a surprise to quite a few when market research firm IDC India reported that Nokia’s market share in India had fallen to a low of 36.3 per cent in AMJ quarter of 2010, in shipment terms. That it managed to retain the No. 1 slot didn’t appear to be a consolation for the Finnish giant, which expressly voiced its disagreement with IDC numbers, as reported in the media.
While the exact market shares may be debatable, the broader trend of the rise of home-grown vendors is not. This is partly due to the fact that, thanks to a supply-chain with cottage handset manufacturing in China, any differentiators in terms of handsets’ hardware and design will only continue to melt away. Further, Indian vendors are paying some serious attention to brand building through TV commercials and other advertising campaigns. This would help bring more consumer pockets to their handset fold.
So if market leaders were to guard their positions and consolidate any further, they will need to build new differentiators, other than those existing in terms of hardware and design.
True, some of their new edge could come from advanced software platforms and applications employed. However, the real play will need to happen in terms of services, to be delivered through app stores. Vendors like Apple that focus on the higher-end consumer segments already bank big on their app stores.
Market leader Nokia is doing that to an extent, but that appears to be somewhat little and late. The handset maker has done a promotional bundling of its Ovi Music store with certain models, most notably the newly launched X6. Additionally, there are offers such as unlimited downloading of songs for select models through an annual subscription.
To gain back some of the lost market shares, however, such bundling by big vendors will need to be more pervasive, while the downloading process should get more intuitive.
Additional consumer-friendly delivery models could also be devised. For example, buyers may be given the option to select songs that can be pre-loaded on the handsets they order. The retailer can double up as a vendor partner for handling the pre-loading technicalities.
Simple value-additions like this would go a long way in serving and winning consumers in smaller towns and rural areas, which are still bandwidth starved and where downloading songs and music can be slow to the extent of being discouraging and prohibitive.
Given that rural mobile markets are going to be an increasingly growth segment, such service offerings can assume importance and make a difference. It’s one thing that app stores ‘have’ reach and it’s another thing that they reach out.
(As published in Deccan Chronicle on October 7, 2010.)

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