BANGALORE, INDIA: India’s mobile device market grew to more than 100 million unit shipments in 2009, and is poised to grow by 10–12 per cent in 2010. As per a new Ovum report – “The Indian mobile device market comes of age”, competition is intense, with several local Indian brands joining the fray and gaining share from the major OEMs. Their aggressive marketing and focus on locally popular features such as dual-SIM have changed the competitive dynamic in India and increased the need for more localized strategies.
 
“Ovum expects the volume mix to shift to the mid- and high-tier segments as the replacement cycle shortens and users upgrade their phones. This trend, combined with 3G launches, will drive sales of smartphones and high-end feature phones,” says Shiv Putcha, principal analyst with Ovum’s Emerging Markets practice. 
 
Mobile handset and USB dongle sales in India have surged in the last couple of years, driven by the rapid growth in connections. India’s mobile device market has grown strongly, passing 100 million units in 2009 (to put this in perspective, the market was barely 50 million in 2007). India’s mobile operators averaged nearly 15 million net additions per month in 2009 as the market surged to 525 million connections, driving mobile penetration up to 45 per cent. The Ovum estimate of 110 million device shipments in 2009 includes both GSM and CDMA handsets and data cards, but excludes the refurbishment/used sales market.
 
The device market has now diversified considerably beyond Nokia, but the player still maintains a dominant share of almost 60 per cent. Besides the major OEMs such as Nokia and Samsung, there has been a bevy of new entrants into this space over the last couple of years. These entrants have come from diverse backgrounds and have gained a meaningful share by innovating with features specifically targeted at Indian consumers. These innovations have now prompted competitive responses from the likes of Nokia, Samsung, and LG, which are responding with new models that boast features such as multi-SIM functionality, enhanced battery life, and low-cost QWERTY keyboard models.
 
Overall the Indian mobile device market is vibrant, with healthy competition and varied offerings in all segments of the market. The volume mix is also shifting towards the mid to high tiers as the replacement market starts to pick up steam. The entry-level market is still dominated by Nokia, but Samsung and local Indian brands are making inroads. The remaining demand is serviced by a competitive market for refurbished and used phones. The smartphone segment is approximately 2.5 per cent of total shipments but is set to expand with 3G launches and pent-up demand for data. This high-value segment will be keenly fought over, with a compelling user experience and app stores becoming the key differentiators.

“The entry of India brands has catalyzed the market and shaken up several device segments. Price is of course a key factor but increasing segmentation is evident as device vendors compete for new buyers. In terms of features, social networking is increasingly driving messaging and mobile Internet usage in India. An accompanying trend is that users are also focused on media capability even in the mid tier as consumption of high quality apps and services increases through increasingly sophisticated app stores.” concludes Shiv Putcha.