1. Smart Phones
(Handset)
Market in
India
Mona Swarnakar
Date: 28/05/2013

2. Table of Content
1. Executive Summary
2. Introduction
3. Global Smartphone Market
4. Indian Smart Phone Market






Overview and Size
Key Drivers
Challenges
Trends
PESTEL analysis
Porter's Five forces analysis
4. Competition Analysis  Vendor segmentation and analysis of vendors
 Top 4 vendors in India 



Samsung
Micromax
Sony
Nokia
5. Bibliography

3. Executive summary
•
Market
Smartphone shipments in India are expected to rise to 155.6 million
units in 2017 from 27.8 million in 2012.
India expected to become the third largest smartphone market by 2017
Samsung is the leading smartphone manufacturer in India.
•
•
Drivers
Drivers &
challenges
Trends
Major
players
•
Continued decrease in mobile
prices
Increasing standard of living and
buying behavior of consumers
•
•
•
•
•
Challenges
•
•
Low penetration in rural area
Security and privacy concerns
Growing popularity of large display mobiles
Trend of Android mobile phones
Multicore processor
High resolution touchscreen display

5. Global Smartphone Market
•
Global Smartphone: Vendors shipped 219.4 million units in Q4
2012, which represents 45.5 percent of all mobile phone
shipments, the highest percentage ever
•
On an annual basis, 712.6 million smartphones were shipped
globally in 2012, which was 44.1 percent more than the 2011
figure
•
Future Forecast: Globally, smartphone shipments are forecast to
edge out feature phone shipments in 2013 for the first time, with
vendors expected to ship 918.6 million smartphones in 2013
•
China to remain the leading market: China will remain the world’s
largest market for smartphones, specifically low-cost handsets
using Google’s Android operating system and to a lesser degree on
Apple’s iOS

6. Country level smartphone market share
60%
51%
50%
49%
40%
30%
21%
20%
21%
21%
18%
5%
10%
2% 3%
2% 2%
India
Brazil
5%
0%
China
USA
2011
•
•
•
UK
Others
2012
China is the leading country in terms of smartphone shipment in 2012, moving slightly ahead of the
2011 leader, the US
The developing nations such as India and Brazil are far behind in the smart phone space and
contributes only 3 percent and 2 percent respectively
UK is among the leading countries in Europe with market share of 5 percent

7. The future of worldwide Smartphone Market
China #1
China market share in smartphone
market in:
2012: 20.7 %
2016: 20.2 %
2016 scenario
---------------------------•
United State #2
US market share in smartphone
market in:
2012: 20.6 %
2016: 15.3 %
Brazil
Brazil market share in smartphone
market in:
2012: 2.3 %
2016: 4.7 %
Smartphone
Market
•
India
India market share in smartphone
market in:
2012: 2.9 %
2016: 9.3 %
India and Brazil, are
projected to enter the
top 5 countries for
smartphone shipments.
The growth rate for India
is expected to be
significantly higher than
most other countries

8. Global market - Vendors
2011 & 2012 Unit shipment
Global Smartphone market share
16.0%
250
200
6.0%
40.0%
150
6.0%
100
50
6.4%
25.6%
0
Samsung
Apple
Nokia
2011
•
•
•
2012
HTV
RIM
Samsung
Apple
Nokia
HTV
RIM
Others
Samsung is the leading player in smartphone shipments in 2012. Samsung covers 40 percent
market
Apple follows Samsung with a market share of 25 percent, followed by Nokia at 6.4 percent, and
HTC and Research in Motion (RIM/ BlackBerry) at 6 percent each
Other players in the market are Sony, LG, and Motorola. Also the market has regional players such
as Micromax, Karbonn, etc.

9. Global Market – smartphone penetration
Top 10 countries with smartphones penetration
Singapore
92%
•
Sweden
86%
Australia
79%
US
78%
S. Korea
76%
•
Hong Kong
87%
Switzerland
76%
Denmark
75%
UK
74%
Norway
74%
The above representation shows that Singapore, Hong Kong and Sweden are the top three
countries in terms of smart phone penetration, indicating their strong consumer technology
economies. Each of these countries have a relatively small total population, ranging between 5
to 10 million
The US is the fifth most penetrated country with 78 percent of its adult population using
smartphones. South Korea and the UK have the 2nd and 3rd largest populations among the
top 10 penetrated markets, with roughly 50 million and 60 million respectively

10. Global Market – operating systems
Top smartphone operating system
Others
4%
Linux
2%
Windows Phone
3%
Blackberry OS
iOS
Anroid
•
•
•
•
5%
19%
68%
The above graph represents that Android is the preferred platform among smartphone users, with
68 percent of market share
BlackBerry devices were being used by just 5 percent of all respondents, when it's believed to be
one of the most popular business smartphone in the world
iOS has 19 percent market share globally and after that Windows and Linux are next most common
operating systems in the global market
Windows OS is introduced in the market with Nokia Lumia and it will take time to acquire more
market share globally

12. Smartphone shipments to India are forecast to rise to
155.6 million units in 2017 from 27.8 million in 2012
Market overview (snapshot): India
•
•
•
•
•
•
In India, smartphones sales more than doubled in 2012 to reach 27.8 million units
India to become third largest smartphone market by 2017
India’s smartphone market is expected to grow sharply because of a variety of
factors, including greater availability of low-cost devices and emphasis on less populous
regions. In addition, expansion of 3G network coverage and the rollout of 4G networks is
expected to boost smartphone sales in the country
India’s year-on-year smartphone shipment growth is expected to be the highest among
the top countries – China, US, UK, Japan and Brazil
Currently only 10 percent of the mobile consumers in India use smartphones, but that is
expected to change in the next few years
India will become the third largest smartphone market by 2017 after China and the US

13. Top 5 Mobile Operating Systems in India: 2012
•
4% 2% 2% 2%
•
15%
•
75%
Anroid
•
Blackberry OS
Symbian OS
•
Apple iOS
Windows Phone OS
Linux Mobile OS
The above chart shows that Android is the preferred
platform among smartphone users, with 75 percent
of market share
The surprising bit was that BlackBerry devices were
being used by just 4 percent of all respondents, when
it's believed to be one of the most popular business
smartphone in India
•
•
•
66 percent Smartphone users in India
are youth and young adults aged 16 –
34 years.
Facebook updates, SMS and Email are
the top three activities by Indian
Smartphone users
Number
of
Internet
enabled
Smartphones to reach 264 million by
2016
India is the third largest country in
terms of Android App downloads.
However, majority of the app market
growth is still being driven by free apps
In 2012, Smartphone market in India
recorded commendable 87 percent
growth
In 2012, 221.6 million mobile handsets
were shipped, out of which 206.4
million handsets were feature phones
or smartphone feature phones. It
projects a big opportunity for local and
global Smartphone makers to tap the
Indian market aggressively

14. Key Drivers
•
Increasing standard of living and buying power of consumers is leading to
growing usage of smartphones.
•
Availability of low cost mobile phones is also leading to the growth of the
market. The handset manufacturers are providing low cost smartphones to
consumers – manufacturers such as Micromax, Karbonn, and Lava are
providing feature packed low cost phones
•
Improving features is also driving the growth. The manufacturers are providing
multiple and innovative features to attract customer such as large
display, latest version of operating system, hi-end graphics, etc.
•
Increasing usage of mobile internet is also driving the growth

15. Challenges
• Low penetration in outer and rural areas in India
• Security and privacy concerns
• The smartphone prices are higher as compare to other value phones, hence
there are still many consumer using low priced mobiles
• There are business phones such as blackberry that are still used by the
corporates
• The battery charge cycle of smartphones are less as compare to value phones
• Tabs are introduced by the mobile phone manufactures, which can prove to be
a challenge in the future

16. Trends
Large display
mobile phones
Demand of touch screen large display mobiles has
increased considerably over the years
Android operating system has market share of more
than 50 percent in India. More consumer are looking
for Android mobile phones, which has better features
Rise of the
phablets
Android-based
mobile
phones
Phablet is a class of smartphones with screen sizes
ranging between 5.0 and 6.9 inches, designed to
combine the functionalities of a smartphone
and tablet, and avoid the need to carry two devices

17. Trends
Multi-SIM
smartphones
Another visible trend is the rise of dual-SIM phones.
All the manufacturers are increasingly providing dual
SIM phones at low rates
Mobile manufacturer are providing multi core
processor smartphones which provides advantages
such as better speed and reliability
Usage of Mobile
Internet
Multi-core
Processor
Another trend is usage of internet in smartphones.
Checking emails, reading books, using networking
sites such as Facebook, Twitter etc. are common now
a days

18. PESTEL analysis smartphone market in India
Political
•
•
•
The political situation of
country more or less stable
Import and export oriented
economy.
Internet regulations.
Technical
High growth technology country
New discoveries of technologies
Speed of technology transfee.
Economical
Social
• Fastest growing economy
in the world
• Inflation rate is on higher
side.
Consumer
purchasing
power is increasing.
Increasing
need
of
communication.
Environmental
Legal

19. Porter’s Five Forces Model Analysis : Smartphone Market in India
Threat of new entrants
High
•
•
•
Bargaining power of suppliers
High
•
•
Presence of large number of
handset manufacturers presents
the suppliers with multiple
opportunities
New handset manufacturers are
entering the market
Smartphone market is a high
growth market
Growth opportunity in most of the
markets/ regions are high
Still enough space for introduction
of low priced smart phones
Rivalry among existing players
High
•
•
•
There are many players in market
Competition among the players is
high
Every year the mobile companies
are coming up with new
technologies with focus on all
levels of consumers
Threat of Substitute products
Low
•
Although Tabs are introduced, they
are not as mobile as smart phones
Bargaining power of buyers
High
•
•
•
Presence of large number of
manufacturers with similar
features
Entrance of new companies
Presence of local companies
with low priced phones

21. Micromax
India’s Vendor segmentation for 2012Q4
•
•
•
•
•
•
•
Karboon
Nokia
Sony
Samsung(40%)
HTC
Apple
LG
Blackberry
Others
Top 5 smartphone
vendors:
1.
2.
3.
4.
5.
Samsung
Micromax
Sony
Nokia
Karboon
Samsung is the major vendor of smartphones in India and have more than 40 percent of market share In India
Samsung has recently launched Samsung Galaxy S4, the world’s first quad core processor smartphone, inspiring both
international and domestic vendors
Micromax is 2nd largest smartphone vendor. It has recently launched Canvas HD with high definition screen
Sony is in 3rd position and has launched new xperia in the market with new up gradation
Nokia is in 4th position in smartphone market. Nokia has launched Nokia Lumia with windows 8 operating system
Karboon has made it to the top 5 for the first time; launched new range of attractively priced smartphones that were
launched in 2012
HTC, LG, BlackBerry, etc. are the other vendors who provides smartphone to the market. Local players in India's market
are Lemon, Spice, Lava, etc.

22. Company Information:
Products and services:
•
Samsung group is a South Korean
multinational conglomerate company. It
was founded in 1938. Samsung Electronics
Co., Ltd. is the largest world’s technology
company in terms of revenues. It is the
largest mobile phone maker and television
manufacturer and is the second largest
semiconductor chip producer. Samsung has
acquired more than 40 percent of market
share in the smartphone space.
•
•
Consumer Electronics (CE)/ Audio
Visual (AV) Business
Home Appliances (HA) Business
Information Technology (IT) Business
Office and center in India:
Headquarter: Samsung Town, Seoul, South
Korea.
Office: Japan, India,
Key People:
Vice Chairman & CEO: Oh-Hyun Kwon
President & CEO: B D Park
Director: Gee-Sung Choi. Han-Joong Kim
&Byeong-Gi Lee
Founded : 1938
Revenue : US$ 247.5 billion (FY 2011)
Website : http://www.samsung.com/
Samsung latest Smartphone:
Samsung Galaxy S4 & S3
Samsung Galaxy Grand Duos.
Samsung Galaxy S duos

23. Key ratios
2010
2011
2012
ROA
13.1%
9.5%
14.2%
ROE
19.9%
14.4%
21.4%
Debt/EBITDA
0.38
0.50
0.34
15
EBITDA/Interest
Expenses
48
45
76
100
10
Net Margin (%)
10.4
8.3
11.9
50
5
Asset Turnover
1.25
1.14
1.19
0
0
Financial Leverage
1.52
1.52
1.51
Current ratio (%)
154%
161%
186%
Liability/Equity (%)
50%
53%
49%
Debt/Equity (%)
12%
14%
12%
Net debt/Equity (%)
- 13%
- 12%
- 19%
PER (X)
8.95
11.88
9.88
PBR (X)
1.81
1.77
2.13
Price/Sales (X)
1.04
1.09
1.29
Financial snapshot
250
23.8
201.1
200
150
USD (Million)
154.6
165
16.1
13.8
2010
2011
Revenue
25
20
2012
Net Profit
Financial key summary
•
•
•
Samsung smartphone sales has increased as
compare to last years
Samsung covered more than 40 percent market
share in India
Company revenue was USD 201.1 million and Net
profit was USD 23.8 million in 2012
PE
9.74

24. STRENGHT
SWOT Analysis
•
•
•
•
Hardware integration with many open
source OS and software
Innovation and design
Low production costs
Largest share in mobile phones and first
place in smartphones sales
WEAKNESS
•
•
•
OPPORTUNITIES
•
•
•
•
Growing smartphone market in India
Growing mobile advertising industry
Growing demand for quality application
processors
Obtaining patents through acquisitions
Low profit margin
Lack its own OS and software
Too many products, hence may loose
focus
THREATS
•
•
•
•
•
Saturated smartphone markets in
developed countries
Rapid technological change
Declining margins on hardware
production
Breached patents
Price wars with other players

25. Company Information:
Micromax, is the 12th largest handset
manufacturer in the World. Micromax’s
product portfolio embraces more than 60
models today, ranging from feature
rich, dual-SIM phones to QWERTY, touchenabled smart-feature phones and 3G
Android Smartphones. Globally, Micromax
caters to a varied target audience having
their focus majorly on the youth. Its
overseas product portfolio is tailor-made to
suit the needs and aspirations of the
growing consumer base in the international
markets.
Founded : 1991
Revenue : US$ 368 million (2012)
Website : Micromaxinfo.com
Products and services:
•
•
•
•
Phones
Datacards
Funbook
Consumer Electronics
Office and center in India:
Head office: Gurgaon, Haryana, INDIA
Offices: Bangladesh, USA, Nepal, Hong
Kong, UAE, Brazil
Key People: Rajesh Agarwal
Sumeet Arora
Rahul Sharma
Vikas Jain
Micromax latest Smartphone:
Micromax A115 Canvas 3D
Micromax A116 Canvas HD
Micromax Canvas 2 A110

26. Financial snapshot
Key ratios
2009
Revenue
3,000
3000
2,299
2500
1,978
2000
1,565
1500
1000
500
120
344
0
2008
2009
2010
2011
2012
2013 E
Total Operating
Income
Growth in PAT (after
Defer Tax) (%)
ROCE(%)
Long term debt
equity ratio
Current ratio
Average Inventory
(Days)
2010
2011
173.02
355.03
46.86
93.75
108.41
303.48
182.59
17.2
85.51
0.02
1.45
0.01
1.5
0
1.17
25
18
35
Financial key summary
•
•
•
•
Local brands such as Micromax has also raised its share in the smartphone market in India
Revenue of Micromax has increased in the last five years
Revenue is expected to climb about 50 percent in 2012/13 after a 14 per cent fall the previous year
Micromax profit also increased in 2011 to 146.59 crore from 110.35 crore in 2010

27. STRENGHT
SWOT Analysis
•
•
•
•
•
Provide long list of functions at much lower
costs, e.g.- touch screen, camera, wireless
FM, ultra long lasting battery life
Regional languages support, Indian
calendars, Torch
Most phones are dual SIM/Triple SIM phones
Due to Java support a lot of basic applications
can be run on these phones
Using most demanded operating system for
smartphones
WEAKNESS
•
•
•
OPPORTUNITIES
•
•
High growth in the developing regions
Low price phones are in high demand, hence
will present growth opportunity for Micromax
Poor after sales support
Build Quality is inferior, tacky looks, low
resolution and small screens, higher radiation
levels, complex
User interface for not so tech-savvy
consumers, unreliable
THREATS
•
•
•
Threat from low priced well known brands
Other lower end phone brands
Low-end phones market has become very
competitive

28. Company Information:
Sony Mobile Communications AB (formerly
known as Sony Ericsson Mobile
Communications AB) is a multinational
mobile phone manufacturing company and
a wholly owned subsidiary of Sony
Corporation. In 2001, as a joint venture
between Sony and Ericsson a Swedish
company, under the name of Sony Ericsson.
In 2012 Sony has acquired Ericsson shares
in the venture. Sony mobile is world’s 10th
largest mobile manufacturing company in
the world as on third quarter 2012.
Founded : 2001
Revenue : EUR 5.212 billion (2011)
Website : http://www.sonymobile.com
Products and services:
•
•
•
•
•
Smartphones
Mobile phones
Mobile music devices
Wireless systems
Wireless voice devices
Office and center in India:
Head office: Tokyo, Japan
Offices: Japan, India, Sweden, china, US
Key People:
Kunimasa Suzuki (President and CEO)
Bob Ishida (EVP and Deputy CEO)
Sony latest Smartphone:
Sony Xperia™ L
Sony Xperia™ ZR
Sony Xperia™ SP

29. USD (Million)
Financial snapshot
8,000.00
7,800.00
200
7,770.71
95.29
0
7,600.00
-200
7,400.00
-400
7,200.00
-600
7,000.00
6,811.52
-800
6,800.00
-1000
6,600.00
-1200
-1,474.44
6,400.00
6,200.00
-1400
-1600
2011
Revenue
2012
Profit
Financial key summary
•
•
•
Sales for the year ended March 31, 2012 decreased 12.4 percent year on year
The decline reflects certain component shortage from the great east earth quake, floods in Thailand
and lower number of features phones shipped
The net loss in year 2012 is because of decrease in units shipped and impact of intense price
competition for smartphones and increase in restricting charges

30. STRENGHT
SWOT Analysis
•
•
•
•
•
•
•
•
•
•
•
Diversity among products
Research & Development done in vast number
of Countries including
Sweden, China, Japan, the US and the UK
Creation and Innovation of Fantastic Products
Most attractive & innovative Global Brand
WEAKNESS
•
•
•
•
•
OPPORTUNITIES
Mobile phones market in developing
High % of young market
Strong Customer demand for innovative
product
High Disposable income in emerging markets.
Network capabilities and low tariff of service
providers.
Untapped Markets – such as Rural markets
More Demand for luxury products from high
end user
Lack in understanding Customer Preferences
Less technology advancement
Lack of user centered designs
Lack of Brand awareness globally
Less importance given to Promotional
activities
THREATS
•
•
•
•
•
Landline penetration and introduction of Sky
phones for rural areas.
Intense competition.
Bargaining power of consumers.
Strong Competition from Samsung which has
48 percent share
New competitors are entering in market

31. Company Information:
Nokia Corporation is a Finnish multinational
communication and information technology
company. Nokia’s mission is connecting
people
through building great mobile
products for billions of people in the world.
Nokia was the world’s largest vendor of
mobile phones from 1998 to 2012.
However, over the last five years it has
suffered declining market share as a result of
innovation and some smart decisions from
other smart phone manufacturers. The new
Nokia smartphones are incorporating
Microsoft's Windows operating system
replacing the Symbian OS.
Founded : 1865
Revenue : EUR 30.176 billion (2012)
Website : http://www.nokia.com
Products and services:
•
Mobile phones
•
•
•
Smartphones
Mobile computers
Networks
Office and center in India:
Head office: Espoo, Finland
Offices:
Key People:
Fredrik Idestam (Founder)
Leo Mechelin (Founder)
Stephen Elop/ President& CEO
Nokia latest Smartphone:
Nokia Lumia 920/ 720/ 620
Nokia Asha 310

32. Financial snapshot
EUR Millions
EUR (Million)
45,000
40,984
42,446
40,000
2000
1,850.00
35,000
30176
891
30,000
3000
38659
0
25,000
20,000
-1,164.00
-1000
15,000
-2000
10,000
-3,106.00
5,000
-3000
0
-4000
2009
2010
Revenue
2011
2012
Net Income
Financial key summary
•
•
•
•
2009
2010
2011
2012
Gross
margin
32.4
30.2
29.3
27.8
Book value
par share
5.11
4.15
2.85
2.66
Return on
Assets
4.94
-3.09
-9.39
-7.91
Return on
Equity
13.47
-8.87
-31.16
-26.29
Current
Ratio
1.55
1.46
1.43
1.29
Quick Ratio
1.13
1.04
1.06
0.99
Financial
Leverage
2.72
3.05
3.72
3.72
Debt/Equity
0.29
0.63
0.63
0.45
Inventory
turnover
13.5
11.27
11.26
10.54
1000
Nokia’s revenue decreased in 2012 as compared to
previous year’s due to increase in number of smart
phones
launched
by
competitors
such
as
Samsung, Sony, Micromax etc.
Net Loss in 2012 was -3106 million (EUR) ,where in 2011
net loss was -1164 million(EUR)
Although Nokia is the largest phone manufacturer in
world but the company is running into losses
The company’s huge challenge is to hang onto the low
end phone market while also converting many of its
Symbian smartphone users onto Nokia-branded Windows
Phone products in the future

33. STRENGHT
SWOT Analysis
•
•
•
•
Largest distributer of mobile phone in the
world
Highly qualified personnel
User friendly with many accessories
High re-sale value compared to other brand of
mobile phones
WEAKNESS
•
•
•
•
OPPORTUNITIES
•
•
To expand with a wide range of
products, features and different price range to
suit different people
Adopting new OS like Windows to increase its
market share in the smartphone market
Poor after sales service
Very few service centers
High cost on R&D
The companies high end product is weak as
compare to other competitors
THREATS
•
•
•
.
Inexpensive phones, advanced features and
good after sales services from other
competitors
High and increasing popularity of Androidbased smartphones
Availability of inexpensive Android phones

34. Smart phone price and specification - Comparison
Micromax
Sony
Price
(INR)
Operating
system
Samsung Galaxy 4
40,300
Android
Jelly bean
1.6GHz Quad Core +
1.2GHz Quad Core
Processor
1 GB
Yes
Yes
Yes
Samsung Grand
Duos
19,500
Android
Jelly bean
1.2 GHz Dual Core
Processor
1 GB
Yes
Yes
Yes
Micromax Canvas
HD
15,000
Android Jelly
Bean
1.2 GHz Quad Core
Processor
1 GB
Yes
Yes
Yes
Micromax Canvas
3D
10,000
Android Jelly
Bean
1 GHz Dual Core
Processor
512 MB
RAM
Yes
Yes
Yes
37,990
Android Jelly
Bean
1.5 GHz Qualcomm
Snapdragon S4 Pro
Quad Core Processor
2GB
Yes
Yes
Yes
Sony Xperria SP
25,000
Android Jelly
Bean
1 .7 GHz Qualcomm
Snapdragon S4 Pro
Dual Core Processor
1 GB
Yes
Yes
Yes
Nokia Lumia 920
Nokia
Model
Sony Xperria Z
Samsung
Brand
Processor
Ram
3G
Wi-Fi GPS
32,000
Windows
Phone 8
1.5 GHz Dual Core Krait
Processor
1 GB
Yes
Yes
Yes
Nokia Asha 311
6,250
Series 40
1 GHz Processor
128 MB
RAM
Yes
Yes
Yes

35. Bibliography
•
•
•
•
•
•
•
•
http://www.sony.net/SonyInfo/IR/financial/fr/11q4_sony.pdf
http://www.idc.com/getdoc.jsp?containerId=prIN24017513
Flipkart.com
http://www.nokia.com
http://www.sonymobile.com
Micromaxinfo.com
http://www.samsung.com
IDC.com

36. Executive Summary
Mona Swarnakar