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Mobile Market
An analysis of mobile phone market in India
Vaibhav Gupta, Varun Kaw, Rahul Shah, Tapas Tiwari, Tsetan
AngmoManagerial Economics2nd September
2011
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Growth and Diffusion of Mobile Phones in India
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Quote (optional)
Quote source
A lot of people think that the new economy is all about
theinternet. I think that it's being fuelled by the internet - as
well as by
cell phones, digital assistants, and the like - but that it's
reallyabout customers.
Patricia Seybold
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Worlds second largest telecom market in the world.
10 million new users added per month.
Urban Teledensity = 70% Rural = 30%
Liberal Foreign Investment Regime 74% FDI allowed.
Government- provides tax sops and telecom specific SEZ
Governments Revenue ( regulatory charges + taxes)
increase as operators revenue increase.
India: Ideal destination for Investments
Low Teledensity= Higher Opportunity
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Mobile Handset v/s FDI
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Mobile Tele- Density
10 fold increase in teledensity from 2003-04 to 2010-11
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Production and Export (millions)
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How it helps the economy micro view
Some things which we might not have thought as a benefit
Example of reach of FM Radio
Example of m-commerce
Increased productivity by smart phones
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Market Target and Segmentation- Economic View
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Segmentation Strategy
Potential Market
Lower incomegroup
Middle Income
Group
Top IncomeGroup
Features Base Features Base
Features Base
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Our Survey
We surveyed about people choice and preferences for a
mobile
143 overall responses, 70 manual
Population contains people from all age and income groups
Sample is a bit skewed towards people of age-group 25, 60% of
population
from this group. Considering the average population to be mostly
in thisgroup.
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Survey Tells us
Around 70% of the people surveyed believed NOKIA is themost
durable phone.
However more than 50% of the people in the incomerange
>20k/month preferred BB or APPLE .
In the income bracket
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46 users responded Nokia
Likely to be a normal distribution (>30)
Average salary = 26.67
S.D. = 7.633
90% confidence interval Income group of Nokia users 20k-31k
Income for Nokia Users
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Success Story 1- Kerala Fisherman
Gets a good catch of sardines .
So do the rest of the fishermen
Increased supply makes the prices fall.
The fishermen has to throw back into the ocean the unsold
fishes In the nearby village the supply was short
In came the mobile phones in 1997
After that the consumer prices fell sardines fell 4% and
thefishermens profits rose by 8%
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Success Story 2- VAS Revenue generation by VAS.
ABCD of VALUE ADDED SERVICES. Communication with god has changed
over the years
Rather than waking up in the morning to a jarring alarmwake up
with a prayer @30rs/month
Other devotional services provide the auspicious and
theinauspicious dates of the calendar year
Free quotes from your god @28/month or 7/week with afree screen
saver too.
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Mobile Banking for Villagers
Scarcity of banking system in villages can be covered up by
mobile banking
March 2012- around 73k villages with 2k population
eachidentified for mobile linked basic bank.
UID to be linked with the Banking Correspondent to makethe
transfer foolproof.
Not glitch free can have some power and connectivityissues.
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Drivers and trends
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Drivers
Government
Policy Telecom
policy
Industry
specificforeign policy
Market Players
NOKIAstarted up inIndia in1995
93 handsetcompanies atpresent
Income Level
Per capitaincome
Massive
middle class
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Drivers -2
Price
Handsets
ranges from1k 50k
Very lowusage tariffs
Customization
User-
friendliness Responding to
the consumerbehavior
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Calling Rates also drives market
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Challenges
Low level of penetration in semi-rural and rural areas with
skewed teledensity of 64.74% Lack of Infrastructure
Saturation at urban level
Mobile internet users
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Trends
Replacement Sales
Payments and Banking go online
Hardware to Software transition- applications and utilities.
Smart phones and tablet convergence
Rise of Indian companies
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Latest innovations
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Players , Competition and Factors of Demand
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Major Players in India
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FYIs
Finnish handset maker Nokia is losing its market share in
India Nokia currently has a market share of 36.3% at the end
of
June 2010 from 54% at the end of June 2009.
Second biggest player happens to be Samsung .
And MicroMax has surprisingly become the 3rd largestplayer
recently according to market share.
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Different Tier of Mobile Phone
LOWER TIER(Rs1500 to Rs10000)
70% of revenue generate from this market segment.
MID TIER (Rs10000 Rs25000)
20% of revenue generate from this segment.
TOP TIER (Rs25000 to Rs100000)10% of revenue generate from this
segment.
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Tier and Buying Pattern
Basic Users Lower and Top
Tier GroupsMiddle Income
Features
Price
BUY
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Our Survey
For the basic users durability, battery life, warranty and
user
friendliness sound quality was very important and otherhigh end
technologies didnt mattered.
Most of these persons were either daily wage earners or
thepeople above 60. An interesting thing to note was that 3 out
of 6 persons gave importance to camera as well. Mobile with a
camera is on the way to become a basic
feature.
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Till the age of 40 we discard phones justwithin 1-2 years
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SWITCHING
Switching propensity from lower level segment to the
midtiersegment is expected to increase with the increase ofincome
level and technology development
Lower Tier Mid Tier
1.Income level
Increase
2. Technologydevelopment
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Women and Mobile
Global opportunity as well as social welfare
300 Million Fewer Female than Male Subscribers: A US$13Billion
Opportunity
Mobile Phones Unlock Economic Opportunities, help tosave time
and money, improve productivity, increase returnon investment and
maximize household resources.
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MERA MOBILE MERA SAATHI
Mobile penetration among women in many developingmarkets is
consistently low.
In an effort to bridge the mobile gender gap in India ,
Uninor joined forces with the GSM Association Womenadvocacy
campaign.
It was officially launched in January 2011, in the states of
Uttar Pradesh and Bihar.
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Key Developments, Customer expectations and
Behaviour
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Key Developments
India has become the largest market now in terms of sales
and growth rate. Apple is ahead of Nokia and RIM Blackberry in
Smart
Phones Market globally.
G-Five, Micromax , Lemon, Fly have become increasinglypopular.
Thus increasing the competition .
The number of handset makers in India has grown from 5to 28 in
the last year alone.
Impact: Market is tending towards Perfect Competitionunlike
earlier times when it was tending towards Oligopoly.
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Success of Indian Companies
Target Segment: Rural Market & Low Wage Earners.
Strategic Pricing: Cheaper models with loaded features.
Connect with Customers on the basis of their region
&language.
Freedom Of Shifting to a better platform, better brand ornewer
technology later.
M-Commerce in Rural India.
Applications like Weather forecasts, crop prices, fertilizer
prices etc. on VAS Services.
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Customer Buying Pattern
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Market Share(Survey Results)
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MALEFEMALE
Nokia sells for its durability,applications and
user-friendliness.
Among working males,Blackberry is highly
popular because of itsemail and calendar syncfeatures
Among elders and seniorlevel professionals, Apple
is the preferred choicebecause of its exclusivityand appeal
Our Survey Suggests that
Sony Ericsson and Samsungare popular because oftheir styling,
music andcamera features.
Among working females,Nokia is a popular optionbecause of its
featurepacked phones in thesegment, and ease of use.
Among Elderly females, nokiais preferred option due itits
simplicity of operation
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Expectations
62% of Male and 66% of Females want to locate restaurants and
shops
in a particular radius. ( most wanted feature).
50% Of female respondents want to locate and track their friends
usingthe mobile , while only 30% males want that.
10 out of 63 female want to use barcode to find product info
while 57 outof 109 males would love to use it.
Revolutionary Phone Deal ?
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Revolutionary Phone Deal ?
We surveyed that how much they can shell out for the worlds
best phone made ever having these features
1. Face Recognition
2. Voice Assisted GPS with advanced navigation usingMQRS
technology.
3. 3D Video Recording, 3D video playback and gamingwithout
glasses.
4. Universal In- built remote to handle all devices in your
home.5. Lots of Hitech features like WiDi over Wi-Fi.
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There was no Deal- it does not exist
Average money that people having the last two digits we
asked for between the range of 0-50 was 16.5 k While the average
for the other half, (50-100) was 23.5k
Behavioral economics can explain this.
Known as Anchoring effect
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The Iphone
Using Behavioral economics to determine the consumer
base of Iphone.
The exclusivity and Constructed Preferences theory.
Too much choice issue with other phones.
Sheena S. Iyengar and Mark R. Lepper,
When Choice is demotimavating : can one desiretoo much of a good
thing
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Work In Progress
Correlation between the no. of phones owned and the
demographic classification Coefficient ofdetermination.
Factor analysis-- correlation between ranking of
differentfeatures, and then arranging into clusters, the
features
which show highly correlated ranks
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Questions and Comments?
You can also mail your comments and suggestions
[email protected], or shoot us on Facebook group.
Thanks for Listening
mailto:[email protected]:[email protected]
