Gloves are off as local heroes fight to grab a third of India mobile market

Last fiscal, these top four together accounted for just about one fifth

Indian handset makers are roaring away. In 2012-13, Micromax, Karbonn, Lava, and Intex made up just a fifth of the Rs 35,946-crore handset market in India. But in 2013-14, the share shot up to a third, according to data published by Voice & Data (V&D).

Experts and analysts have estimated the market size to have risen to Rs 40,000-45,000 crore in 2013-14.

As in 2012-13, Samsung is expected to have dominated the market in 2013-14 in value terms, primarily because of the success of its Galaxy range of smartphones, analysts say. In 2012-13, Nokia was the second-largest handset seller.

Micromax, the top Indian handset maker and the second in the overall market, had said it would close 2013-14 with revenue of about Rs 7,500 crore, against Rs 3,138 crore in the previous year. Karbonn has estimated its revenue at Rs 4,500 crore, against Rs 2,297 crore in 2012-13. Lava, considered the third-largest Indian handset maker, is estimated to have doubled its revenue from Rs 1,200 crore in 2012-13.

Early this week, Intex, a late entrant in the handset business and primarily known as an information technology peripherals company, said it had doubled its revenue to Rs 2,000 crore in FY14. Of this, Rs 1,300 crore came from the handset business, the company said, adding in 2012-13, the handset business had accounted for revenue of Rs 400 crore.

If others such as Spice, Zen and Max are taken into account, the total contribution of Indian handset makers to the Indian market could be about half, said a senior executive of an Indian handset maker.

A primary factor behind the growth seen by Indian handset makers is these firms are focusing on smartphones, as the feature phone market has been slowing through the past few quarters. A senior executive of an Indian handset maker said through the next year, smartphones priced below Rs 10,000 would become the main source of revenue for domestic handset makers. “Indian handset makers have already brought in smartphones priced below Rs 3,500, and the average selling price is rising. Through the next few quarters, the average selling price for Indian handset makers will cross Rs 5,000; currently, this is between Rs 2,000 and Rs 3,000,” he said.

In a report in February, International Data Corporation (IDC) had said the quarter ended December 2013 had seen a rise in smartphone shipments by domestic vendors such as Lava and Intex.

“The growth in the smartphone market is being propelled by the launch of low-end, cost-competitive devices by international and local vendors, which is further narrowing the price gaps between feature phones and smartphones,” said Manasi Yadav, senior market analyst, IDC India.

In 2013, smartphone shipments stood at 44 million, against 16.2 million in 2012, the IDC report said. “This surge has primarily been powered by domestic vendors which have shown tremendous and consistent growth through the past four quarters,” it said, adding 2013 had seen “remarkable migration” of the user base from feature phones to smartphones, primarily due to the narrowing price gaps between these categories.

In 2013, the overall phone market stood about 257 million units, an 18 per cent rise compared with 218 million units in 2012.

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