Motorola (Moto) – Is this a new beginning for Indian low-cost smart phone market?

I am not a gadget freak nor do I have any peculiar interest in analyzing ‘technicalities’ of smart phones. In fact I have outsourced my technical support to one of my cousins (IT engineer) for queries ranging from how to copy contacts from SIM to phone to changing the access point of ISP etc! But this blog is an attempt to take stock of the ever increasing low-cost smart phone (devices) market in India. 

Indian consumers are price conscious. We don’t just compare features across two phones. We compare price to features ratio more diligently. So how do we go about choosing a smart phone? We look at the most attractive/popular brands available in the smart phone market. We then check for some striking features of those branded phones in low-cost phones. If a phone gives us similar features in lesser price, we often don’t care about the brand image of the seller. The dominance of Micromax is pretty evident when it comes to preference for low-cost smartphones in India. Micromax Canvas A110 was an instant hit. This was followed by Karbon (Titanium), Lava (Iris), Intex (Aqua), iBall (Andi) and many other up-starts.

So how did Samsung and Nokia (I don’t want to mention Apple here! Perhaps Sony and HTC deserve this place) decide to beat this heat from smaller players? On one hand was their cost of R&D which was easily getting marginalized due to new entrants and on the other hand was the falling market share. Remember they can’t go too low on prices as the heavy expenditure on promotions (ads) needs to be recovered. The only way they could do it was to allure the low-cost preferring consumers with several options in their desired price range. They decided to bombard market with variants! Well, this does not work. Here we prefer ‘all-in-one’ over ‘many-for-all’. Unfortunately this strategy of fragmenting value across hundreds of smaller products did not work so well. So Samsung S Duos and Lumia 520 are obviously struggling to catch-up with smaller players in India. 

And now comes Motorola, a Google company (not anymore – sold to Lenovo!), is here. All three products namely Moto X, Moto G and the newly launched Moto E are super-hits. Why? Because of the KISS approach (Keep It Simple Stupid!). Just three segments – 20K+, 10K+ and 5K+. X (24,000) is for those who have 20K something to spend and who want maximum features. G (14,000) for young crowd with moderate income. They are happy with slightly lesser features too. E (7,000) is for anyone who thinks 5K something is the best way to start spending on a smart phone. This three segments approach makes things easy for consumers who otherwise face pressure of tremendous choices. Moreover the only place to get them in India is via E-commerce platform called Flipkart! No confusion of comparisons within the brand , no haggling with shopkeepers, no undue expectations. This in my opinion is a great strategy for India. 

There might be very few people (compared to the total market size) presently using E-commerce platforms to make their buying decisions. But the numbers are increasing exponentially. Moreover an average Indian today is not shying away from using internet for his/her shopping needs. Here is a brand which has understood the pulse of low-cost smart phone buyers. Initially they might earn thin margins but a very rich future awaits them. 

It’s a wake-up call big brothers. Some comebacks hit really hard.

Author: anilkshatriyablog

I work as Assistant Professor in the area of Accounting at IMT Nagpur. I love teaching, writing and cycling. I follow a simple principle, 'Help ever, hurt never'.

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