There is a pattern to Samsung’s mobile device launches—they’re usually ahead of Apple’s. It launched the Galaxy S III a few months before the iPhone 5, and its smaller screen tablets hit the markets the moment rumours of a 7-inch iPad began. And just when there was talk of Apple stripping down the iPhone for a cheaper device, Samsung came out with the Galaxy Grand at Rs 21,500. This is cheaper by Rs 15,000 and Rs 11,000, respectively, than the Galaxy Tab II and the Galaxy S III. Such quick responses to consumer demands and catering to all price segments, without compromising on features such as camera quality or user interface, give Samsung a 46.1% share of the Indian smartphone market. Samsung Mobile vice president Asim Warsi says the market is large enough for any brand to claim its space if it gets its strategy right. “We were challenged in the market a few years ago, but created experiences that caught the imagination of our customers and contributed to our success,” he says.
With at least 25 Samsung models to choose from at any time, rivals are struggling to improve market share. The nearest is Nokia with 13% by shipment of devices in Q3 2012, according to IDC India, a market research and data analytics firm. The three iPhone models—4, 4S, and 5—account for 1.4% collectively (3.8 million devices were shipped in Q3). While Nokia is trying to establish its Windows-based Lumia phones, Apple may have just realised India’s importance. Last October, it appointed three distributors—Redington, Ingram Micro, and Neoteric—to improve its reach here. Analysts say this move is responsible for a four-fold jump in the number of iPhone units shipped, which may cross 200,000 units in Q4. “New distributors indicate a change of strategy. It is now going after volumes and is not happy with just the revenue from existing franchise stores or operators,” says Manasi Yadav, market analyst (mobile phones and tablets), IDC India.
This does not mean Apple is ready to challenge Samsung in India and China. Even if Apple doubles its market share in the next few quarters, it may increase the market size rather than directly eat into Samsung’s share. Faisal Kawoosa, senior manager (Telecoms and SemiTronics), CyberMedia Research, another market research company, says Apple is unlikely to dilute its brand image and come out with a low-cost iPhone, or even lower prices for markets such as India.
However, Samsung does not lack competition. Nokia may be down, but Yadav says, “Windows on Lumia looks promising and even developers are taking it seriously. Nokia just needs to get its pricing right.” There are also the BlackBerry 10 devices which hold promise for the parent company.
In the near term, Micromax and Karbonn, which have access to the Android ecosystem on cheaper hardware, will provide Samsung with tough pricing competition. The Micromax Canvas 2 looks like a Galaxy S III clone and has been accepted well by the market at almost a third of the price. Micromax is fast catching up with Sony for the No. 3 slot in smartphones. But the gap between Samsung and Nokia is so wide that only something revolutionary can dislodge the Korean company. While both Sony and Nokia, like Samsung, align their launches to global strategies, making it easy to choose models for the Indian market, Samsung launches 10 to 12 a year, against three or four by its rivals. It also offers local customisations, such as the India-specific myMovies and myMusic apps, pre-loaded on the Galaxy Grand, which give users access to Indian movies, trailers, and film songs, and lets them download or listen to English and Bollywood songs. In addition, its understanding of the consumer electronics space and a deep distribution network give it an edge.
For now, Samsung has no reason to worry. “We have our hands full; the focus will be on increasing the market size of smartphones, which is still a fraction of the total number of mobile phones being sold in India,” says Warsi.