Even though the global smartphone market is lukewarm, India is thriving due to rising demand and price-effective offerings. It is the only market in the world to witness a consecutive growth for the last three years. But out of the top five spots, three are occupied by Chinese smartphone companies while only one – the last one – goes to an Indian company. As per regulatory filings, we now learn that the combined revenue of top Indian mobile phone brands – Micromax, Intex, and Lava – fell to only one-fourth of what Chinese brands generated in India during FY18.
As per the Ministry of Corporate Affairs, the aggregated income of the three Indian phonemakers fell 22% and was approximately ₹105 billion (~$1.5 billion) in FY2017-18. Xiaomi, Vivo, and Oppo, in contrast, reaped a combined revenue of nearly ₹460 billion (~$6.6 billion) for the same period, twice as much as the previous year. The combined profit of the three Indian companies, meanwhile, plummeted by 70% and reached ₹1.87 billion (~$27 million).
Despite this major decline, the companies continued to remain profitable during the period. Micromax raked a profit of ₹1.03 billion (72% lower), Lava harvested ₹0.71 billion (54% less), while Intex earned only ₹0.13 billion in profit which is just 10% of what it did in the previous year. Notably, these losses could have also been due to a ripple effect following GSMA’s alleged bias against them. Recently, major Indian brands appealed international regulator to waive off the unfair certification fees charged to their name for the allocation of Type Allocation Codes or TACs.
Out of the three Chinese brands, only Xiaomi posted a profit of ₹2.93 billion whereas Oppo and Vivo lost ₹3.58 billion and ₹1.20 billion respectively. However, Counterpoint analyst Karn Chauhan now predicts that Indian brands will continue to lose market share in 2019 due to intense competition from Chinese counterparts.
If Intex and Lava wish to recover from this decline in popularity, they must focus on the entry-level segment and try to attract users with lower prices, Chauhan insisted. Meanwhile, they must also be wary of Reliance Jio which has gained in FY2018-19 due to affordable data plans and its smart feature phones. Meanwhile, Chinese brands could be expected to post even higher revenues during this period, pushing Indian brands far behind.
Source: The Economic Times
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