April 22, 2015 1:50:38 pm
Micromax has just launched a new budget smartphone in India, the Canvas Spark, which offers the latest Android OS for a rock-bottom price of Rs 4999. The company was named as India’s number one smartphone manufacturer by Research firm Canalys for the Oct-Dec 2014 quarter, a report that was then countered by Samsung.
But the smartphone market in India has changed drastically in the last couple of quarters with the entry of new players like Xiaomi, Asus, Lenovo to name a few. Shruti Dhapola spoke to Micromax CEO Vineet Taneja on how the company plans to stay ahead of the competition.
Q: What are the expectations from this year? IDC noted that the Indian smartphone market contracted in Q4, 2014? Do you see more of that taking place this year or are you hopeful that this was an aberration?
A: The market is bouncing back. We’re already seeing that in April. Also these guys look at import data, they don’t take into account the pipeline that is expanding and shrinking. For instance, if they wrongly estimate the market, people import more and a lot of the inventory might be left in warehouses. But if you look at consumer tech data, that is quite robust. So we’re not worried about that.
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Q: By launching a very affordable budget smartphone, would you say Micromax is going back to its roots. Other than the Canvas Selfie which was around Rs 15,000, we’ve not seen higher-priced offerings from the company. Is there a particular reason for this shift in strategy?
A: We’re now big enough to follow a portfolio strategy. But yes, the insight is very clear, the smartphone in the sub-Rs 7000 category is growing at twice the rate as the portfolio over it and that’s a clear data. We are leaders in that segment. We are number one in the mass smartphone market and it’s the right space to be.
Of course that doesn’t mean we will ignore the other segments, and we’ll share plans of those later. Today, we’re making sure that we don’t miss out on this fast growing segment.
Just to make the point, almost two million smartphones are sold in the mass segment and people say that’s big. According to me, that’s the tip of the iceberg. Because there are 10 million feature phones that are sold even today and there are 180 million smartphone users in India. Half of them are using very old Android or basic smartphones or your Symbian, even BlackBerry is counted in this.
All these old smartphone users and feature phone users are ready for upgrade and we feel there’s a huge opportunity there. We are very, very bullish about this.
There’s also good news on the data side with spectrum auctions being done. We know 3G and 4G will come and we’ve launched budget 3G devices in the last three months and they are doing extremely well. With that strategy, we are introducing the Canvas Spark at Rs 4999.
Q: We’ve also seen a lot of competition come in like Xiaomi, Lenovo, Asus, etc which are offering smartphones in the same price range. How will Micromax stand out against them? Especially the Chinese competitors, given the kind of media attention they’ve managed to garner.
A: Competition is not new in this country, there’s always been competition, either with the big Korean names or with the Chinese companies. We continue to remain innovative and we really value our relationships. For instance, with this smartphone (Canvas Spark), the deal with Snapdeal was done five months back. They have a commitment, we have one.
Going forward we have certain strategies that will differentiate us from the market. The specs game beyond a point will lose its charm. We will start differentiating our products firstly in terms of look and feel. We’ve set up an R&D team in Beijing and Bangalore. So this Canvas Spark, in hardware terms, has been designed by the Beijing team.
The software team in Bangalore is clearly working on ways to make our software stand out. For example, power management or the quality of the camera. Now, the quality of the camera doesn’t just depend on hardware, but on how you tune the software as well. The team in Bangalore is working on that.
Second part of our strategy is to build our service business, where we start participating in the larger mobile internet ecosystem, whether it be app distribution or music service. These are early days, we are looking at that to differentiate ourselves and generate revenue.
Third leg of our growth is to go out of India and get scale in other developing countries.
Q: How has been the response outside India?
A: In Russia, it’s early days. You know the Russian economy went through a huge turmoil so things have been quite turbulent overall. But other markets like Bangladesh, Nepal and Sri Lanka are very good businesses for us, because there the entire Indian approach works for us.
Q: One of the new buzzwords in Android is the ability to customise. Is Micromax planning to bring some of this to its Canvas brand as well or will Yureka be the only brand offering a customised ROM?
A: Our Yu brand is where it is completely customisation all the way. We do some level of customisation, even on stock Android, but I don’t think in mass smartphones it’s the most important thing. Consumers need some familiarity and while we do some stuff at the kernel level and the application level, apart from that to change completely the UI etc, would be hard for a new customer to adapt. We are not looking at any custom ROM in this mass segment. In the high-end we might do, but that’s something in the works.
Q: What are Micromax’s plans for Make in India ?
A: We’ve been ramping up our capacity quite significantly where certain valued production is concerned in India.
Q: There have been reports that Micromax is up for sale. Are these just rumours?
A: We are looking for strategic partnerships. We’re not doing a sell-out. This is a company that is owned by four founders and they are not going anywhere.
Q: Finally who would you say is Micromax’s biggest competitor.
A: Well, Samsung and us are neck and neck. The others are a distant third and distant fourth.
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