LAUNCHINGAPREMIUM

Capstone
CATEGORYSMARTPHONE Project

FORTHEINDIANMARKET
 Abstract
India is the second largest country in terms of Smartphone users. Total market size of
smartphones in India (2017) was 124 mn units and the category is growing at a rate of 20%
annually. Whereas, premium segment comprises of 4% of total market size i.e. 4.96 mn units and
the same is growing at a rate of 20% annually in terms of volume. Indian smartphone market is
already is a Red Ocean and leave no space for new companies to enter but still many global
players are trying to enter in this red ocean, Huawei being one of them.

Huawei has surpassed Apple to become the world's second largest smartphone maker in
the world. Huawei has already launched 3 brands in India i.e. Honor, Nova and P series. Huawei
is about to launch a new super premium smartphone brand in India called the “Mate 20 pro”.
Technologically it is the world’s best smartphone. It comes with AI enabled chipset, triple
camera, in-screen finger scanner etc. Mate 20 pro ranges from Rs.60,000 to Rs.80,000. It is after
looking at such great market potential in India that they want to launch Mate 20 Pro in the Indian
market.

Our project will describe the Entry and expansion strategy for the same, considering the below
mentioned parameters:

1. Literature Review
2. Segmenting and defining the target group
3. SWOT analysis
4. Key opportunities and issues identified
5. Brand communication strategy
6. Marketing Plan
7. Distribution Strategy
8. Budget of the Marketing plan

1|Page
 Literature Review

Smartphones have been taking the world by storm. This situation is even more
widespread in India, which is the fastest-growing smartphone market in the world. India
reportedly accounts for nearly 30 million smartphone purchases every quarter, and this
percentage keeps increasing several times a year. According to IDC and the Ericsson Mobility
Report, mobile subscriptions in India are expected to rise to 1.4 billion by 2021.That isn’t all.
India is also the second-largest telecommunications market in the world (after China), with over
1.05 billion subscribers.
The growth of the online market has also strongly affected the smartphone industry. The
greatest example is Chinese handset maker Xiaomi, an online brand whose shipments to India
grew by 290 per cent in the third quarter of 2017.Indian market witnessed a record mobile phone
shipment of 87.9 million units in October- December 2017, says a Cybermedia Research report.
With 4G services entering the Indian market, smartphone sales are expected to be at an all-time
high. By 2025, India will have 700 million internet users, with the telecom market touching Rs.
10 trillion.
The premium smartphone segment in India witnessed over 20 per cent growth in 2017
over the previous year, driven by strong uptake of devices from the stables of Apple and
OnePlus. The premium smartphone segment (priced Rs 30,000 onwards) was the second fastest
growing segment (20 per cent year-on-year) by volume, while it expanded by 28 per cent in
value terms in 2017. A report added that while the segment is "more crowded than a year ago",
three brands -- Apple, OnePlus and Samsung -- still contribute to 94 per cent of the overall
premium market segment. In this premium segment, priced between Rs 30,000 to Rs 50,000 a
unit, Apple led market with 48 per cent share, followed by OnePlus with 23 per cent and
Samsung with 10 per cent share.
The ultra-high-end segment saw a strong YoY growth of 68% largely due to strong
shipments of Samsung's Galaxy S9 series which arrived a quarter earlier this year, and led with a
77% share in this segment. OnePlus, owing to its popular models 5 and 5T, continued to keep
more than 50% share in the ultra-high-end segment. Going forward, it is expected that the
premium segment will continue to grow by even more than 20 per cent, both in terms of volume
and value during 2018-2020, as more brands are likely to enter the segment. These include
OPPO, Vivo and Huawei, which have some of their best-selling models in China already in this
segment.
Taiwanese tech giant Asus agrees that it is aggressively strengthening operations and
bolstering supply chain to take on giants like Samsung and Xiaomi in India, which will be
among its top three markets globally in a few years. The company is committed to bringing
premium products to the Indian market. Voto mobile aspires to be one of the leading smartphone
companies by offering its superior handsets in Indian markets. Voto currently has a substantial
sale of its handsets in China under an exclusive partnership with Telco China Mobile. Voto plans
to invest Rs. 500 crores on operations, marketing and promotions in India. According to the
2|Page
 Apple captures most of the industry profits, thanks to its high prices, large profit margins
and the volume of iPhone sales worldwide. Apple’s success is explained as a result of its ability
to develop its own intellectual property (IP) and take advantage of IP created by suppliers
through a strategy of selling only a few models at high prices compared to competitors. It also
benefits from the most valuable brand name in the world. Finally, it maintains exclusive use of
its iOS operating system to keep out competitors in its own ecosystem. Its major competitors,
Samsung and Huawei earn high margins on their most expensive phones, but their overall
margins are reduced by the large number of low-cost products they sell.

Using this diagram as a guide, we calculate the value captured at each stage of the value
chain by estimating the selling price of that stage’s output and subtracting the cost of all
purchased inputs. A product-level study, such as we are undertaking, allows us to break out the
value embedded in an innovative product and clarifies how it is distributed across the many
participants in the value chain. Aggregating this firm-level data, we are able to make an initial
estimate of the distribution of value by country as well. In aggregating firm level data to the
country level, we assign value capture to the home country of each firm even though the location
of production might be elsewhere.

3|Page
 Apple also uses its highly successful retail stores to sell a full assortment of its own
products and those of its complementors. It has kept its product line very lean and focused only
on selling higher price phones, ceding the rest of the market to Android phones. This strategy has
enabled Apple to capture most of the profits in the industry. The Android ecosystem is larger,
with hundreds of phone makers selling thousands of models at all price levels. Samsung has been
the dominant player in this market, while other brands rise and fall around it. Still, the greatest
value is probably captured by Google, which licenses Android for free, but requires phone
makers to install all of the Google mobile apps, with their associated advertising revenues

The 4P’s
1. Product
In 2018, smartphone players are going to provide bigger screen, improved camera, fast
processor, RAM and battery with faster charging. This all will be made available to the
consumer at a competitive pricing like never before. Some key technology trends would include
under-glass fingerprint sensor, iris scanner and face recognition, bluetooth earbuds and
headphones, and augmented reality.
2018 will see more advances and refinements in the design and display of the
smartphones. Antenna lines are moving towards the edges of the display as seen in some
smartphones. The camera elements are expected to get more refined and finding a phone with a
single-lens camera will be more difficult in the future.

2. Price
Budget smartphones will give rise to a new price category INR 2k-5k with 4G
experience. Mid-range smartphones will continue to drive the volume game for all OEMs. Super
premium segment will be flat YoY or may see a marginal increase due to various cash back and
EMI schemes.

3. Promotion
Outdoor and print investments will continue, however may remain flat YoY. Marketers
will seek newer channels on digital and e-commerce platforms to communicate with their
prospective audiences. Mobile and digital will be a primary medium to promote devices with
OEM Marketers focusing over 30 – 35% of their budgets on digital.

4. Place
Push from online channels will continue with sales focused around driving value/margin
than just volume. Offline distribution will come back with host of brands targeting Tier 2, 3 and
4 customers for entry and mid-range devices. Omni channel may start seeing some traction
through partnerships with Operators/MBOs especially in Tier 2/Tier 3 cities.

4|Page
 In conclusion, 2018 will be an exciting year for the India mobile handset ecosystem, with
a clear charter to increase affordability and realize the vision of a New India.

5|Page
6|Page
 Domestic players have diversified their product lines and introduced a wider range of
models with price points targeting different market segments. Domestic firms such as Micromax,
Karbon, Lava and Intex have launched handsets costing as little as half the price of a Samsung,
Sony or HTC model. As a result, they have significantly increased their share of the handset
market. These domestic players have become household names partly through their advertising
and marketing campaigns and sponsorship of sports events.
Applications driving the handset market Mobile apps are becoming a key mechanism
for driving non-voice revenue. Samsung App Store and Google Play Store are already
competing within this space. Samsung India's team is also developing market-specific apps and
content. Vodafone India revised its revenue-sharing policy in favour of app developers and
content providers to encourage increased market-specific app development within India.
Increasing use of social media, internet, mobile banking, gaming and other such data rich
services are key drivers of ongoing growth in sales of applications, which are rising both in
terms of value and volume. Application-focused stores are now being developed to tap this
growing market.
The principal reason why OnePlus seems to have end up a big competitor to Apple and
Samsung is the pricing. With the expenses among 20,000 and 45,000 for the ordinary use
models, it has come to be exceptionally prime for the functions in that fee variety. Definitely.
Unbeatable price, powerful hardware, high-quality screen, purposeful and smooth Oxygen-OS
are all of the features that the young segment of the Indian population would desire. For
example, the brand-new OnePlus 6T or maybe the OnePlus 6, both these telephones wouldn’t
cost you extra than a 42,000. In that price, you get 6GB of RAM, Android eight.1 Oreo,
Snapdragon 845 octa core processor, 256GB of reminiscence and a first rate 3700 mAh battery
with a 6.41” Gorilla Glass protected display screen.
Hyun (2016) investigated Xiaomi as the rising multinational entering and running in
India, an rising and rapid growing smartphone market. By analysing diverse resources of
records, this study certain strategies of Xiaomi getting into Indian phone market from China.
The intention become to assess if emerging multinationals percentage commonplace
backgrounds and motivations of foreign places expansion and whether or not challenges due to
confined assets and skills cultivate any precise strategic differences in the emerging markets.
Hyun (2016) significantly used secondary records collectively with organization’s inner report
and few targeted interviews. In unique, as a way to distinguish the traits of emerging
multinational enterprise from the established, the enjoy of Samsung is as compared to provide
strategic implications. Xiaomi aimed to installation a global approach aimed at efficiency in
producing standardized great product with low price in India, as was carried out in China.
Political and cultural differences in India caused Xiaomi to deploy a localization strategy both
in manufacturing and advertising.
Xiaomi attempted to overcome the constraints of a rising multinational through
pursuing a transnational strategy that introduced efficiency with no extra costs. As a result,
Xiaomi has been able to reuse innovation and knowledge received within the local marketplace
to benefit in addition efficiency globally. Hyun (2016) contributes to theoretical and practical
views. The idea of emerging multinationals in a rising marketplace is surprisingly new and few
studies have addressed the problem.
7|Page
 In specific, the emerging multinational in a rising marketplace has now not been
considered and must be essential subject to in pursuit of a new principle and sensible
implication as greater cases can be found inside the near future. In unique, the precise case of
Xiaomi in India maintained performance through using understanding acquired inside the
course of localization seem to offer crucial implication for the future of emerging
multinationals in rising markets. Though this precise take a look at furnished valid implication,
it has barriers as a unmarried case to generalize findings of this observe related to emerging
multinationals in rising markets. Therefore, it's far essential to take a look at similarly instances
of emerging multinational collectively with empirical exam in this concern.
Dogruel L.(2017) examines the impact of privacy defaults and expert recommendations
on smartphone users' willingness to pay for “privacy-enhanced” features on paid applications
using a 2 (privacy premium default/no privacy premium default) x 2 (privacy expert
recommendation/non-privacy expert recommendation) experimental design. Participants (N =
309) configured four paid apps with respect to privacy features. Selecting premium privacy
features was associated with an increased cost, while removing premium privacy features
reduced the cost of the application. Replicating findings from behavioural economics on default
modes in decision-making, we found that participants presented with apps with privacy
premium default features were more likely to retain the more expensive privacy features.
However, the recommendation source did not have a significant effect on this relationship.

8|Page
 References
1. India's premium smartphone mkt grows 20% in 2017: Counterpoint. (February, 2018). Retrieved
from https://www.ibef.org/news/indias-premium-smartphone-mkt-grows-20-in-2017-
counterpoint

2. Current standing and growth potential of India’s Handset Market. (January, 2018). Retrieved
from https://www.ibef.org/blogs/current-standing-and-growth-potential-of-india-s-handset-
market

3. India will be among our top 3 smartphone markets, says Asus. (April, 2018) Retrieved from
https://www.ibef.org/news/india-will-be-among-our-top-3-smartphone-markets-says-asus

4. Record 87.9 mn mobile phones shipped to India in Q4 2017: CMR. (February, 2018). Retrieved
from https://www.ibef.org/news/record-879-mn-mobile-phones-shipped-to-india-in-q4-2017-
cmr

5. Hussain,M. (May, 2018). The India smartphone market starts the year 2018 with its strongest
ever first quarter shipments, says IDC’, International Data Corporation. Retrieved from
https://www.idc.com/getdoc.jsp?containerId=prAP43810918

6. VOTO to launch its premium range of mobile phones in India, eyes 2% of smartphone market
share, (September, 2018). Retrieved from
https://brandequity.economictimes.indiatimes.com/news/business-of-brands/voto-to-launch-its-
premium-range-of-mobile-phones-in-india-eyes-2-of-smartphone-market-share/65836565

7. Dedrick,J & Kraemer, L.K. (November, 2017). Intangible assets and value capture in global value
chains: the smartphone industry. Retrieved from
https://www.wipo.int/edocs/pubdocs/en/wipo_pub_econstat_wp_41

8. Finding value for the consumer - The Indian mobile industry. (December, 2013). Retrieved from
https://www.pwc.in/assets/pdfs/publications/finding-value-for-consumer/finding-value-for-the-
consumer-the-indian-mobile-industry

9. Singh,B. Decoding the 4Ps of India Mobile Handset Industry in 2018. (March, 2018). Retrieved
from http://cmrindia.com/decoding-the-4ps-of-india-mobile-handset-industry-in-2018

10. India’s Mobile Phone Market. (February, 2014). Retrieved from

http://www.ipsosconsulting.com/pdf/Research-Note-India-Mobile-Phone-Market

11. Hyun,J. (October, 2016). Emerging Multinationals in Emerging Markets: Xiaomi Experience in the
Indian Smartphone Market. Retrieved from http://www.eamsa.org/wp/wp-
content/uploads/2016/10/2_fjtgj

12. Dogruel L. et al., (December, 2017). The valuation of privacy premium features for smartphone
apps: The influence of defaults and expert recommendations. Retrieved from
https://www.sciencedirect.com/science/article/pii/S0747563217304910

9|Page
13. Goodman P. & Sawhney, M. (January, 2016). OnePlus: Crossing the Chasm in the Smartphone
Market. Retrieved from
https://www.researchgate.net/publication/322270319_OnePlus_Crossing_the_Chasm_in_the_Sma
rtphone_Market

10 | P a g e