Online works better for late entrants in Indian smartphone market

Motorola overtakes Nokia in just two quarters, Xiaomi sells over 20,000 units in three weeks

It was Motorola that took e-commerce as the exclusive selling route for its re-entry in India about sixmonths back with Moto G. Over the past two quarter, the company, which sells smartphones online only through Flipkart, has suppressed Nokia in India's estimated 6 million units per month smart phone market.

At the end of June 2014, Samsung had a 25.3% share in India's smart phone market,followed by Micromax at 19.1%, Karbonn (5.9%, Motorola (4.3%) and Nokia (4%), according to Hong Kong-based Counterpoint Technology Market Research. Global research firm Canalys said, in a recent report, Motorola has shipped more than 1.3 million smartphones during the past two quarters, while Nokia, which is still the market leader in total handset market in India, has shipped about 1.2 million units.

Not just Motorola, the newest kid on the block, China's Xiaomi, which also sellssmart phones exclusively through Flipkart, has sold 20,000 units in just about two weeks. Xiaomi, in a statement, has said that it sold the entire weekly stock in just five seconds. "We are working diligently with our manufacturing partners as well as our local partners and the user community here in India to bring more devices and deliver the best possible product experience with Mi 3 and other models to come," Hugo Barra,Vice President, Xiaomi Global said in a statement.

Motorola shipped more than 9.5 lakh units during April-June quarter, Canalys said. Nokia shipped only 6.3 lakh units. During the previous quarter, Nokia shipped 5.8 lakh smartphones as compared with 3.7 lakh units of Motorola.

Indian smart phone shipments' share in April-June 2014 quarter
Company	Share (in per cent)
Samsung	25.3
Micromax	19.1
Karbonn	5.9
Motorola	4.3
Nokia	4
Source: Counterpoint Technology Market Research

"The surprise performance was from Motorola thanks to its attractive but leaner portfolio and go-to-market strategy. The brand which could soon be part of Lenovo has built a strong base in the high volume Indian smartphone market, entering the top five rankings surpassing Nokia, Apple, Sony and others," Counterpoint Technology Market Research said in a report on Monday.

Alcatel, which was the second handset maker after Motorola to tie up with Flipkart for sale of its handsets, had also said that the entire stock of Alcatel One Touch Idol X+smart phone were completely sold out within 24 hours of the launch. It sold about 5,000 units. However, Alcatel, unlike Motorola and Xiaomi, also sells through offline retail.

The success of Moto G through exclusive e-retailing has helped Motorola, which was bought by China's Lenovo for $2.9 billion (approval pending), to emerge as one of the top five smart phone makers in India. Motorola launched Moto G in India towards the end of 2013, more than a year after it shut shop in one of the fastest growing smart phone markets in the world.

Nokia vs Motorola – Total shipments
Quarter	Nokia	Motorola
January-March	5.8 lakh	3.7 lakh
April-June	6.3 lakh	9.5 lakh
Source: Canalys

It has then launched Moto X, priced above Moto G and entry-level affordable Moto E. South Korean smart phone maker Samsung maintained its leadership with more than 4.4 million units shipped in the April-June quarter, followed by Micromax (3.1 million) and Karbonn (1.07 million). Analysts say that the success of Motorola and quick sales of Xiaomi will attract more handset makers to take the online route over the traditional retailing, which may also lead to price rationalisation.

"We will see intensified competition in the Indian smartphone space as Asian handset makers such as Xiaomi, Gionee, Huawei and Asus enter with premium-like hardware at an aggressive price-point attracting young tech-savvy but price-conscious urban buyers," according to Counterpoint Technology Market Research. In theJanuary-March quarter, according to International Data Corporation (IDC), South Korea's Samsung topped the Indian smartphone market with a 35% share, followedby home-grown Micromax with 15%, Karbonn (10%), Lava (6%) and Nokia (4%).

India, the world's third largestsmartphone market, had the highest growth in this segment in the Asia Pacificwith a growth rate of 186% in the first quarter of 2014, says IDC.

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