Can Nokia, Apple, and BlackBerry Thrive in India?
The Indian smartphone industry is growing at a spectacular pace. According to a recent report by IDC, smartphone sales in India rose to 12.8 million units in the third quarter of fiscal year 2013, a 229% year-over-year increase. Yet, the party is far from over for smartphone vendors.
With per-capita income and smartphone penetration rising in the country, the research firm expects the Indian smartphone industry to retain its elevated growth rate over the coming quarters as well. Let's see what Apple , Nokia , and BlackBerry are doing to capture this expected growth.
Apple is known for its expensive, but high-quality products across the globe. Consequently, its market share in India -- comprised primarily of middle-class citizens -- is limited to just 2%. The company is, however, aggressively trying to shed its "expensive" tag to attract the massive base of budget-conscious Indian consumers.
Apple reintroduced its iPhone 4 in India last month, with a price tag of about $330. Singapore-based market tracker Canalys believes that the company can launch a promotional buyback scheme to further drive down the price. Since smartphones priced within a $250-$330 band represent 8% of the total smartphone sales in the country, a budget-friendly iPhone 4 might boost Apple's growth.
The company is also aggressively promoting its high-end models. It has initiated a buyback program for its iPhone 4s, 5c, and 5s, in which the company offers a minimum of $83 for any working smartphone. In addition, consumers also get the option to finance new devices for up to a nine-month period, thereby increasing the affordability of Apple devices.
Considering that Indian consumers are value driven, Apple's promotional campaigns look good on paper. However, it remains to be seen whether consumers will prefer an outdated iPhone 4 to other competitive offerings.
Nokia, on the other hand, operates with a 5% market share in India -- the world's second largest market after China. The company is leaving no stone unturned to grow this number quickly.
Nokia's Asha series consists of 10 java-based cell phones within a competitive price band of $60-$120. Plus, the Finnish giant introduced five new Lumia devices this year. Its Lumia range now consists of 11 Windows-based smartphones with price tags ranging from $140-$770. These diverse price-points attract a wide spectrum of mobility enthusiasts and cost-conscious consumers.
In addition, Nokia will also launch a low-cost Android-based smartphone later this month; rumors suggest the Nokia Normandy will be priced between $50-$99.
Instead of expecting Nokia to amass fortunes from this launch, however, investors should instead welcome this move as a shift in product direction. If its Android smartphone is well-received in emerging markets, the Finnish giant might launch more such devices and expand its market share.
BlackBerry, however, is struggling in India. Its market share has plunged from 14.8% in 2010 to just 1.6% in 2013. There are plenty of reasons to suggest that the company's decline may still continue.
- It's been over two years since the company updated the hardware of its mid-range Curve devices. Consequently, the latest, feature-rich alternatives are devouring BlackBerry's market share.
- In addition, BlackBerry's latest OS 10 devices, the Z10, Q10, and Z30, carry hefty price tags of $450, $600, and $670, respectively. This exceeds the budget of an average Indian consumer.
- BlackBerry India is also dealing with brain drain. To secure their future, more than half a dozen high-ranking executives have left the company and joined Apple, Samsung, and Micromax over the last 3 months.
Clearly, the one-time smartphone leader needs to sort these issues out.
Foolish final thoughts
Apple and Nokia seem to be firing on all cylinders. By targeting the massive base of cost-conscious Indian consumers, both the companies offer an optimistic outlook. However, to thrive in India, BlackBerry needs to quickly innovate and price its products more competitively.
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The article Can Nokia, Apple, and BlackBerry Thrive in India? originally appeared on Fool.com.Piyush Arora has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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