| NEW DELHI/MUMBAI
NEW DELHI/MUMBAI Dec 13 India's Micromax, which
has become the country's No. 2 smartphone brand just five years
after selling its first handset - a $30 made-in-China model - is
looking to go upmarket and overseas.
The unlisted company sold 6.8 million phones in the
July-September quarter including 2.2 million smartphones, and is
on track to surpass $1 billion in sales in the fiscal year
ending in March.
With heavy advertising and phones based on Google Inc's
Android software starting at $50 - almost half the
price of a comparable Samsung model - Micromax has brought
smartphones to the masses in a price-sensitive market where
basic handsets still dominate.
Among all types of phones, Micromax ranks third in India
after Nokia and Samsung Electronics.
The company, which started out selling IT software and
telecoms gear, entered the handset market with cheap phones
featuring bigger screens, and the capability to use two SIM
cards so customers can take advantage of bargains from competing
carriers - a feature Nokia was slow to match.
Now Micromax is looking to broaden its market by wooing
brand-conscious Indians with more spending power. In October, it
rolled out a 19,000-rupee ($310) "phablet" with a 5-inch screen
promoted by "Wolverine" star Hugh Jackman - an unusual choice in
a country where Bollywood actors and cricket stars are the
preferred brand ambassadors.
In January, it will begin selling phones in Russia, followed
by Romania, where competitors also include Samsung and Nokia.
UK-based Fly also sells China-made phones in Russia and Eastern
Micromax has also tried to tap the Brazilian and the Middle
Eastern markets with basic phones, but did not manage to build
scale and closed the operations.
Industry watchers say Micromax, which is backed by private
equity firms TA Associates and Sequoia Capital, has its work cut
out pushing into pricier segments dominated by global brands and
building its brand from scratch in new markets.
"Operators worldwide are already flooded with choices from
other low-cost Asian Android smartphone players," said Neil
Mawston, a UK-based executive director at Strategy Analytics.
SIMS FOR ALL OCCASIONS
As mobile Internet prices in India have started falling, the
smartphone market has taken off, with Micromax and other local
vendors of low-cost China and Taiwan-made phones such as Karbonn
and LAVA pushing hard into small towns.
"Effectively, they gave people, the youngsters especially,
the first opportunity to graduate to a smartphone. And a good
quality smartphone," said Himanshu Chakrawarti, chief executive
at The Mobile Store Ltd, a large mobile phone retail chain.
In India, where about 250 million handsets are sold
annually, smartphones accounted for 20 percent of sales in the
latest quarter. Few, however, can afford an Apple
iPhone or a high-end Samsung Galaxy.
To keep costs down, Micromax mostly uses chipsets made by
MediaTek and Spreadtrum, which tend to be
cheaper than those made by industry leader Qualcomm Inc
. It does not have its own manufacturing plant,
outsourcing production to China and Taiwan, but will start
assembling some phones at a plant in northern India from next
Rahul Sharma, a company co-founder, said he got the idea for
a dual-SIM phone when he saw his cook used three SIM cards.
"He said one SIM card is local, and a second is for me to
call my native village because the plan is very attractive,"
Sharma said during an interview at his office near New Delhi.
MOVING UP MARKET
As Micromax moves into the higher end, it competes more
directly with international offerings in the 15,000-rupee and
above price range, where brand matters more to consumers.
"We think Micromax will struggle in the higher end of the
smartphone market because richer Indian consumers often prefer
the cachet of international brands," Mawston said.
Some retailers also say Micromax's after-sales service lags
that of global brands. "We do acknowledge that and are working
very, very hard on that," Sharma said.
Micromax will keep pushing up the feature chain even as it
continues to offer budget models, with plans to launch
smartphones with faster "octa-core" processors, 16 megapixel
cameras and high-definition screens.