Nokia, Samsung Face Low End Cellphone Threat from Indian OEM

[katharnak]

Nokia enjoys dominant market share in India, but a majority of low income Indian mobile users surveyed by Strategy Analytics would prefer their next phone to be made in India. Indian brands-like Lava, Micromax, and Spice-will benefit from this preference, according to, "Nokia Dominates Low-Income India but Domestic OEMs Enjoy Strong Home Country Support," a report from the Emerging Markets Communications Strategies (EMCS) service of Strategy Analytics. International brands that do not enjoy Nokia's brand equity-such as vendors Samsung, LG, and Sony Ericsson - may have difficulties in the low-end handset market.

The Indian brands have only been on the market for a few years, and collectively they have only gained modest market share. However, 63% of the respondents, those who primarily live in rural villages and secondary cities with average monthly household income of about $130, say they would prefer their next phone to be manufactured in India, citing as key reasons:

    Lower cost and greater value for money, and
    Greater ease of repair and availability of parts.

"National pride is a factor, but when people spend almost 4% of their annual income on a mobile phone, they are going to make purchase decisions based on what will get them the most for their money," notes Tom Elliott, Director of EMCS.

According to Strategy Analytics projections, the bulk of new mobile users in India over the next five years will be low income consumers, particularly in rural areas. "Affordable mobile phones with an appealing set of features will be the key to success in this market," says Rahul Gupta, EMCS Senior Analyst in India.