Devices like the Micromax Yu Yureka have proven popular online in India as they offer customers something that they just don't get elsewhere; an affordable smartphone with modern software and guaranteed updates. However, it would appear that the focus on e-tailing or the big names in the Indian smartphone market might not be working all that well for names like Micromax and co. At least, according to a new report that shows the smartphone market in India as having declined by 7% this quarter compared to Q4 2014.
The report, which shows that feature phones are once again on the decline, this time by as much as 18% shows the rivalry between Samsung and Micromax heating up. In Q1 2015, Samsung managed to grab 27.9% of the mobile sector, with Micromax falling to 16.2%. This is one of the biggest gaps seen between the two companies, but we need to remember that Samsung continues to sell feature phones in the market. Micromax will be looking to close the gap in the coming months, and they'll be hoping that further releases from their new subsidiary Yu will help cast a bad light on outdated, budget Galaxy models.
One area in which analysts from CMR think that companies need to work on is trying not to become like Xiaomi. Karn Chauhan from CMR Analysts said that: "While seasonality had its play in this quarter, some players also need to revisit their strategies and perhaps not rely very heavily on online sales. e-Retailing works effectively for a brand aiming for 0-5% or 5-10% of the market share and those without a wide portfolio like Xiaomi and OnePlus. But, if you are Micromax, having a double-digit market share of middle to higher order price segment handsets, trying to replicate what Xiaomi and OnePlus are doing isn't a very good idea. At the same time one has to look at the segment contribution. While Xiaomi, OnePlus and other emerging brands are 'Smartphone only' brands, Micromax still gets around half its contribution from feature phones."
This slight decline could be a lot more than just seasonality, as there's a possibility that those who wanted a smartphone already have one. The next challenge is to convert those still using feature phones to inexpensive devices like the Moto E and the Galaxy E series.