Top-end handset sales seen rising this year

The top end of the GSM phone handset market is set for a makeover this year thanks to falling handset prices and changing consumer choices.

The 'fashion and lifestyle' segment, i.e., phones with in-built camera, swanky games and audio, was expected to contribute 23 per cent of overall sales this year compared with 13 per cent in 2003.

"We hope segment sales to touch 6 million sets in 2004. Last year, the volume was only 1.95 million handsets," Pankaj Mahindroo, president of Indian Cellular Association (ICA), said.

During the period, the total market for GSM is expected to double from 13 million to 26 milli on.

To boost sales volumes, leading handset manufacturers had set in motion a process to reduce the entry barrier in this segment.

Nokia has recently brought out its 3200 model which has an in-built camera. It has been priced at Rs 11,000, cheapest in the category.

The move is significant, as the entry level price for a Nokia camera phone was earlier as high as Rs 17,500 for the Nokia 7250I handset. Close to the Nokia model in terms of price was the Motorola E365 which is priced at Rs 12,500.

Experts said demand from the replacement market coupled with affordability would drive growth in this segment.

"There is now a significant number of people using mid-featured phone which comes between Rs 6,000-10,000. As prices of high end phones come down, people find it easier to upgrade to higher level," they pointed out.

Mahindroo said a growing percentage of first time users were buying high-end sets. Lured by gizmos offered by high-end phones, youngsters were thronging to buy these phones.

While no statistics were available, Mahindroo said this was a growing trend.

The expected higher sales could also be attributed to the boom in the Indian economy. "There is optimism in the economy, currently" he said.

"Duty cut announced earlier this year has reduced handset prices. It also bridged the gap between grey and regular market," Mahindroo noted.