Mobile Market
An analysis of mobilesubtitle style in India Click to edit Master phone market Vaibhav Gupta, Varun Kaw, Rahul Shah, Tapas Tiwari, Tsetan Angmo Managerial Economics 2nd September 2011
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Growth and Diffusion of Mobile Phones in India
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A lot of people think that the new economy is all about the Quote (optional) internet. I think that it's being fuelled by the internet - as well as by Quote source cell phones, digital assistants, and the like - but that it's really about customers. Patricia Seybold
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India: Ideal destination for Investments
Worlds second largest telecom market in the world. 10 million new users added per month. Urban Teledensity = 70% Rural = 30% Liberal Foreign Investment Regime 74% FDI allowed. Government- provides tax sops and telecom specific SEZ Governments Revenue ( regulatory charges + taxes) increase as operators revenue increase.
Low Teledensity= Higher Opportunity
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Mobile Handset v/s FDI
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Mobile Tele- Density
10 fold increase in teledensity from 2003-04 to 2010-11
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Production and Export (millions)
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How it helps the economy micro view
Some things which we might not have thought as a benefit
Example of reach of FM Radio Example of m-commerce Increased productivity by smart phones
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Market Target and Segmentation- Economic View
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Segmentation Strategy
Potential Market
Lower income group
Middle Income Group
Top Income Group
Features Base Features Base Features Base
Our Survey
We surveyed about people choice and preferences for a mobile 143 overall responses, 70 manual
Population contains people from all age and income groups Sample is a bit skewed towards people of age-group 25, 60% of population from this group. Considering the average population to be mostly in this group.
Survey Tells us
Around 70% of the people surveyed believed NOKIA is the most durable phone. However more than 50% of the people in the income range >20k/month preferred BB or APPLE . In the income bracket <10k brands didnt matter features did. Battery was essential in every segment.
Income for Nokia Users
46 users responded Nokia Likely to be a normal distribution (>30) Average salary = 26.67 S.D. = 7.633 90% confidence interval Income group of Nokia users 20k-31k
Success Story 1- Kerala Fisherman
Gets a good catch of sardines . So do the rest of the fishermen Increased supply makes the prices fall. The fishermen has to throw back into the ocean the unsold fishes In the nearby village the supply was short In came the mobile phones in 1997 After that the consumer prices fell sardines fell 4% and the fishermens profits rose by 8%
Success Story 2- VAS
Revenue generation by VAS. ABCD of VALUE ADDED SERVICES. Communication with god has changed over the years Rather than waking up in the morning to a jarring alarm wake up with a prayer @30rs/month Other devotional services provide the auspicious and the inauspicious dates of the calendar year Free quotes from your god @28/month or 7/week with a free screen saver too.
Mobile Banking for Villagers
Scarcity of banking system in villages can be covered up by mobile banking March 2012- around 73k villages with 2k population each identified for mobile linked basic bank. UID to be linked with the Banking Correspondent to make the transfer foolproof. Not glitch free can have some power and connectivity issues.
Drivers and trends
Drivers
Government Policy
Market Players
Income Level
Telecom policy Industry specific foreign policy
NOKIA started up in India in1995 93 handset companies at present
Per capita income Massive middle class
Drivers -2
Price Customization Userfriendliness Responding to the consumer behavior
Handsets ranges from 1k 50k Very low usage tariffs
Calling Rates also drives market
Challenges
Low level of penetration in semi-rural and rural areas with skewed teledensity of 64.74% Lack of Infrastructure Saturation at urban level Mobile internet users
Trends
Replacement Sales Payments and Banking go online Hardware to Software transition- applications and utilities. Smart phones and tablet convergence Rise of Indian companies
Latest innovations
Players , Competition and Factors of Demand
Major Players in India
FYIs
Finnish handset maker Nokia is losing its market share in India Nokia currently has a market share of 36.3% at the end of June 2010 from 54% at the end of June 2009. Second biggest player happens to be Samsung . And MicroMax has surprisingly become the 3rd largest player recently according to market share.
Different Tier of Mobile Phone
LOWER TIER(Rs1500 to Rs10000) 70% of revenue generate from this market segment. MID TIER (Rs10000 Rs25000) 20% of revenue generate from this segment. TOP TIER (Rs25000 to Rs100000) 10% of revenue generate from this segment.
Tier and Buying Pattern
Basic Users Tier Groups Lower and Middle Income
Features
Top
Price
BUY
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Our Survey
For the basic users durability, battery life, warranty and user friendliness sound quality was very important and other high end technologies didnt mattered. Most of these persons were either daily wage earners or the people above 60. An interesting thing to note was that 3 out of 6 persons gave importance to camera as well. Mobile with a camera is on the way to become a basic feature.
Till the age of 40 we discard phones just within 1-2 years
SWITCHING
Switching propensity from lower level segment to the mid tier segment is expected to increase with the increase of income level and technology development
[Link] level Increase 2. Technology development
Lower Tier
Mid Tier
Women and Mobile
Global opportunity as well as social welfare 300 Million Fewer Female than Male Subscribers: A US$13 Billion Opportunity Mobile Phones Unlock Economic Opportunities, help to save time and money, improve productivity, increase return on investment and maximize household resources.
MERA MOBILE MERA SAATHI
Mobile penetration among women in many developing markets is consistently low. In an effort to bridge the mobile gender gap in India , Uninor joined forces with the GSM Association Women advocacy campaign. It was officially launched in January 2011, in the states of Uttar Pradesh and Bihar.
Key Developments, Customer expectations and Behaviour
Key Developments
India has become the largest market now in terms of sales and growth rate. Apple is ahead of Nokia and RIM Blackberry in Smart Phones Market globally. G-Five, Micromax , Lemon, Fly have become increasingly popular. Thus increasing the competition . The number of handset makers in India has grown from 5 to 28 in the last year alone. Impact: Market is tending towards Perfect Competition unlike earlier times when it was tending towards Oligopoly.
Success of Indian Companies
Target Segment: Rural Market & Low Wage Earners. Strategic Pricing: Cheaper models with loaded features. Connect with Customers on the basis of their region & language. Freedom Of Shifting to a better platform, better brand or newer technology later. M-Commerce in Rural India. Applications like Weather forecasts, crop prices, fertilizer prices etc. on VAS Services.
Customer Buying Pattern
<14 MALE Nokia 14-19 Nokia 20-25 Nokia/ Samsung 26-39 40-59 60+ iPhone
Blackberry/N iPhone/ okia Blackberry
FEMALE Sony Ericsson Samsung Nokia/ Samsung
Nokia
Nokia
Nokia/Sony Ericsson
Market Share(Survey Results)
Our Survey Suggests that
Nokia sells for its durability, applications and userfriendliness. Among working males, Blackberry is highly popular because of its email and calendar sync features Among elders and senior level professionals, Apple is the preferred choice because of its exclusivity and appeal
Sony Ericsson and Samsung are popular because of MALEtheir styling, music and camera FEMALE features.
Among working females, Nokia is a popular option because of its feature packed phones in the segment, and ease of use. Among Elderly females, nokia is preferred option due it its simplicity of operation
Expectations
62% of Male and 66% of Females want to locate restaurants and shops in a particular radius. ( most wanted feature). 50% Of female respondents want to locate and track their friends using the mobile , while only 30% males want that. 10 out of 63 female want to use barcode to find product info while 57 out of 109 males would love to use it.
Revolutionary Phone Deal ?
We surveyed that how much they can shell out for the worlds best phone made ever having these features
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Face Recognition Voice Assisted GPS with advanced navigation using MQRS technology. 3D Video Recording, 3D video playback and gaming without glasses. Universal In- built remote to handle all devices in your home. Lots of Hitech features like WiDi over Wi-Fi.
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There was no Deal- it does not exist
Average money that people having the last two digits we asked for between the range of 0-50 was 16.5 k While the average for the other half, (50-100) was 23.5k Behavioral economics can explain this. Known as Anchoring effect
The Iphone
Using Behavioral economics to determine the consumer base of Iphone. The exclusivity and Constructed Preferences theory. Too much choice issue with other phones.
Sheena S. Iyengar and Mark R. Lepper, When Choice is demotimavating : can one desire too much of a good thing
Work In Progress
Correlation between the no. of phones owned and the demographic classification Coefficient of determination. Factor analysis-- correlation between ranking of different features, and then arranging into clusters, the features which show highly correlated ranks
Thanks for Listening
Questions and Comments?
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