The rise and rise of smartphones

In an advertisement by a mobile company, a young girl taunts an older person that he doesn't have a dual-SIM smartphone that can also track markets. In another ad, an actor, instead of asking bystanders for directions, chooses to use an app on his phone to look for a restaurant.

We look at the rise of the smartphones and what this translates into in sheer numbers.

According to data by Cybermedia Research and Industry, of the 500 lakh mobile handsets sold in the quarter ended March 2012, 5.3 per cent or 27 lakh units were smartphones. While this seems like a significantly small share in the pie, experts say the smartphone segment is likely to contribute over 30 per cent in total sales in 2012, amounting to a whopping Rs 83,377 crore.

With India being a cost-conscious market, the under-Rs 10,000 segment has seen the highest jump in sales. It contributes over 60 per cent of total smartphone sales in 2012. Practically every cellphone maker is looking to capitalize on this demand with offerings under Rs 10,000, including big ticket names like HTC. Local brands like Micromax, Lava and Karbonn are further adding to the basket of competitors which includes foreign brands like Nokia, Samsung, Sony and LG.

So what is driving the sales of smartphones? Experts say that falling prices of smartphones to as low as Rs 3,000 coupled with a drop in shelf-life of mobile phones is driving masses to replace their existing phones. Moreover, the Indian consumer has an increasingly wide array of smartphones to choose from as over 150 models have been launched in 2011 alone and more are expected in 2012.

Finnish cellphone maker Nokia still holds the majority market share in the Indian market at 38 per cent. But with strong competition from Korean rival Samsung, which holds a 28 per cent market share in the country, Nokia is scampering to hold its dominance by introducing new models in the under -Rs 10,000 category. Its Asha series of smartphones, priced in the range of Rs 4,000 to Rs 9,000, has seen volumes build up.

In the luxury segment, Nokia is playing its cards by introducing the Lumia series of smartphones, powered by Microsoft's Windows 7.5 operating system. It is also working on introducing the Windows 8 update in the Indian market soon this year, in a bid to gain back share lost to Samsung, using the famous Android systems.

Nokia has reason to worry too as data for Q1 of 2012 suggests that Samsung has eaten into its market share, shrinking it to 25.5 per cent. In comparison, the Korean-maker led with a 40.4 per cent market share. Samsung is capitalizing on the demand for Android smartphones, with four models priced under Rs 10,000, seven models in the Rs 10,000-18,000 price range (of which one has a Windows 7.5 OS) and five ultra-luxury feature-loaded models priced as high as Rs 40,000.

Trying hard not to be left behind is Canadian player Research In Motion (RIM) with its famous business qwerty phone, the Blackberry. The pioneer in the business-model segment, RIM has now shifted gears to target the college-going student. It also offers one smartphone for the cost-conscious consumers-the Curve 8520. According to data, it stood third in terms of market share at 15 per cent in 2011. However, its share has fallen marginally to 12.3 per cent in the first quarter of 2012.

HTC, which was generally known to provide high-end phones, too has entered the competition to target the lower-end masses. It has one model in the sub-Rs 10,000 segment, the Explorer, which it believes is a window to its higher-end models that consumers will upgrade to later.

Some other players in the market are Sony, LG and Motorola, along with homegrown brands such as Karbonn and Micromax, with some of them even offering Android-based models. Apple's blockbuster iPhone too has a presence, albeit a smaller one, in India, thanks to a burgeoning grey market.