Unbranded Chinese handset may be wiped out

30 new handset makers beeline in to India

New Delhi, Dec 27 2009

Bhaskar Hazarika

Unbranded Chinese handset likely to face death with the Indian mobile market flooded with more than 30 new handset makers. With 506 million subscribers in the country, the market is attracting entry of new players in the segment. In the present financial year, the market saw the entry of 25 new players.

The Indian handset industry shipped around 130 million units in 2009 and the numbers are likely to escalate to 150 million in 2010. According to industry estimates, the mobile handset market is pegged at Rs 35,000 crore in 2010.

Unlike the dominant handset makers such as Nokia, Samsung, Sony Ericsson and LG, the segment is witnessing entry of new handset brands, which are available at much cheaper costs with added features.

President of Indian Cellular Association, Pankaj Mohindroo said the growth in the mobile subscriber base has attracted the entry of new players in to the market. “There is a lot of space for entry of new players, which will ensure fair competition in it. Compared with the past couple of years the prices of handsets have come down reasonably. The average price of a handset has come down to Rs 2,300 from Rs 5,500 before,” he said.

Mohindroo said that the entry of affordable handsets in the market will hurt the grey market, which is flooded with unbranded Chinese brands. He said that availability of legal IMEI number on these brands is likely to have an impact on the unbranded handsets.

The new entrants into this space include Micromax, Lava Mobiles, Karbonn, Mobell, Videocon, Movil and also some known brands such as Usha, Salora, Onida and Orpat. According to market estimates, the new players have managed to attain 15 per cent market share.

Shashin Devsare, executive director of Jaina Group of Karbonn Mobiles, said, “We are competing in the GSM space, which is 8.5 to 10 million units per month. Affordable multimedia solution and features for subscribers is our business model. We are primarily targeting the tier II and III towns, where we see the next phase of growth.”

TV maker Salora has tied up with a Singapore-based mobile phone manufacturer, Mobell, to market its handsets in the country. Vice chairman and managing director of Salora, Gopal Jiwarajka, is of the view that the handset market will be robust for the next five to 10 years. “We are positioning our product for entry level and the replacement market, targeting the new subscriber base, who is a first time user. Usually the lifecycle of a handset is estimated to be around 18 months and there is a huge percentage of subscribers in the handset replacement category,” he added.

Managing director of LG Electronics, Moon B Shin, said there is space for new layers in the handset space. “The market is not saturated in this space. We have 6 per cent market share and are targeting 10 per cent next year. The market will witness entry of players and the ones that meet customer requirements will stand the competition,” he said.

© Financial Chronicle