Indian Co’s Branding the China Mobile | Also Targeting Ultra Low Cost Handsets

January 16, 2010

in india, Mobility

More on those emerging India “brand” china phones. They have reached rural India. The retailer will tell you he can buy them in Mumbai for 1800 rupees and make 400 to 600 on each one. Here’s what a typical store front looks like today.

He’s supporting a range of local china phone brands which are now getting heavy advertising support. Karbonn is a more recent entrant March 2009 and the brand is backed by UTL Group (big in telecom infrastucture) and Jaina Group a prominent distributor of consumer durables. The rapid increase in low cost Chinese product entering the Indian market created an opportunity for larger organizations to enter the market and offer back-up 12 month warranties and support. These phones are typcially priced between 2000 to 5000 rupees. <$50 to approx $100. Karbonn remains small claiming 1.5 million units sold and over 500 service centers.

The number and variety is has stolen from Nokia’s shelf space. The POS material is plastered everywhere. Just another up and coming brand and new products. The sheer weight of support materials lends some credibility. The Independent retailer will back it up with service and repair. The big Nokia banner which I presume was outside the store originally has been hung in the back room behind the store.

Typically the distinguishing features of a “china phone” are dual-sim,  “sound” / speakers and an adequate  media player. Screens are often larger than the more portable low cost Sony’s although may have much lower resolution. You still hear “drop it once” and it is broken. Building a brand and a service story can be a profitable way to get around that. You may also note that they “oversize” design elements like the camera and speakers, even the screen although it is often low resolution. The retailer quickly tells positive usage stories. It’s clear that the retailer is making his money on China Phones.

Another new entrant with deep pockets is Micromax who plan on opening 100 of their own stores. They may be successful. Some of their designs are slick and they take aim at Nokia with “ultra long battery life” , “30 day standby”.

Another company “Spice” will invest 100cr in a local indian manufacturing plant to produce 2 million phones a month. (That’s 20% of the current market). Their focus is an ultra-low cost phone talked about at Barcelona this year. It’s a voice only device that does away with the screen by announcing the digits as they are dialed. It will retail for 800 rupees or less than $20. (It’s another question as to whether this will be successful although for “line in” – Lifetime Sim – where it won’t be seen in public – it could be a secret weapon if family plans became common place).

What’s the net net? China phones are being branded with plans to manufacture locally. They are being increasingly adapted for Indian conditions and the market size makes it a prize worth going after.

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