Nokia is by far the biggest player in the Indian mobile market. The company opted for a “price sensitive” policy and gave equal importance to low-cost feature phones and high-end smartphones alike. And it’s little wonder that its strategy to woo the masses with the “low cost” factor worked like wonders in the world’s second most populated country.
Not many phone makers can dare to take on Nokia when it comes to the “price game”. However, a small Indian pay phone company called Micromax thinks otherwise. With as many as 37 models launched in just over a year and a half, Micromax is now India’s third-largest GSM mobile phone vendor with a market share of 6 percent after Nokia (62 percent) and Samsung (8 percent).
Micromax is here to stay and take the fight to Nokia. As one of its founders, Vikas Jain puts it – “We are not the poor cousins of Nokia. Instead we will force Nokia to launch newer products to compete with us.”
India is amongst the fastest growing mobile markets worldwide. Nearly all major phone manufacturers including Apple, RIM, Nokia, Samsung and others have a strong presence in the country. Though many analysts argue that India’s mobile segment is severely “overcrowded” and “stagnant”, it didn’t deter a group of four friends to dream the unthinkable – challenge Nokia with low-cost mobile phones. And then, Micromax was born.
Though the company has existed on paper since 1991, it launched its first phone in 2008 – a device with an oversized battery, a small screen, and tweaked electronics that made the phone run for as long as five days, and on standby for as many as 30 days. The founders hit on the idea that India has several people who can afford a low-cost mobile phone but have no or little access to electricity. The objective was to manufacture a phone which could be sold with “long battery life” as the differentiating factor. Micromax has never looked back since then. Based in Gurgaon, near the national capital of Delhi, Micromax offers entry level phones starting at $40. Understandably, the low-end phones do not have Wi-Fi, 3G or GPS capabilities. Therefore, it reduces the hardware cost dramatically.
Micromax is selling nearly 1 million handsets each month. Nokia’s fall (64 percent in 2008 to 52 percent by the end of last year) has been Micromax’s gain. The company has ambitious plans to sell 30 million phones a year by the end of 2011—including 6 million in Africa and Latin America. Several private equity players including Boston-based TA Associates have invested in the company. Dual-SIM phones have been a huge hit for Micromax as an increasing number of Indian population is getting used to the idea of using multiple SIM cards.
Though Nokia maintains that Micromax is “too small” to be worried, there is no doubt that the former is reeling under intense competitive pressure. Touted as “India’s Mobile Phone Hitmaker” and “Next Giant Killer” by the press, Micromax is truly living up to its name.