|Chennai||Rs. 24020.00 (-0.17%)|
|Mumbai||Rs. 25020.00 (0.28%)|
|Delhi||Rs. 24450.00 (0%)|
|Kolkata||Rs. 24600.00 (-0.32%)|
|Kerala||Rs. 24050.00 (0%)|
|Bangalore||Rs. 24160.00 (-0.17%)|
|Hyderabad||Rs. 24030.00 (-0.12%)|
It leads the tablet market in India ahead of global giants like Samsung and Apple (according to CyberMedia Research figures released on Monday) and is the third largest mobile player in terms of volumes.
Micromax, which entered the mobile space just four years ago in 2008, is doing all this, and more: the company on Tuesday forayed into the home entertainment space with LED televisions and home theatre systems.
And co-founder Rahul Sharma says it's quite possible that Micromax will do a Samsung and storm the global markets with its products. "As a brand, we want to be able to touch the lives of consumers. The whole conversion from mobile phones to smart phone to tablets and to TV will happen sooner than later. And we want to be part of that story," says Sharma.
With presence in nine countries, Sharma at the moment is focusing on the domestic market and wants to capture all the available screens in the country. That may not be too tall a claim as the India Quarterly Media Tablet Market Review for the second quarter of this year shows Micromax has 18.4 per cent of the tablet market in India against Samsung's 13.3 per cent and Apple's 12.3 per cent.
The company has also been inching up in the mobile segment. Apart from being the third largest player with 8 per cent share behind Nokia and Samsung, it is also the 12th largest manufacturer. The Global Handset Vendor Marketshare report from Strategy Analytics stated in the second quarter of 2011 (the latest figures available), Micromax topped the micro vendor rankings, shipping four million handsets worldwide.
The numbers are impressive for a late entrant. In four years, Micromax has managed to log in sales of close to 1.5 million handsets per month.
So what is the key to Micromax' success? Experts attribute it to low pricing, unique features, focus on entry level products and a huge distribution set-up. In the tablet space, its products start at Rs 6,000 and go up to Rs 9,999. The same is evident in its LED TV launch. An entry level LED TV of 24" from Micromax costs Rs 15,990 and a full HD smart TV of 55" costs Rs 129,990.
But Sharma downplays the price warrior adjective. "Pricing was never our driving force. When we launched our first mobile handset, it came with a battery that lasted for 30-days. In the tablet space, we focused on the education and the entertainment segment. Going ahead you will see more products in tablet. The volumes in this space are only expected to go up," Sharma says.
Micromax' strategy with the tablet revolves around education and entertainment (edutainment). The Funbook has tie-up for education related digital content from Pearson, Everonn and Vriti. For entertainment, it comes preloaded with Bigflix (free movie for a month), Hungama, Indiagames and Zenga. Micromax introduced its product only in April this year and with five products, it has sales of 65,000-70,000 per month.
A significant aspect of Micromax's success is its distribution network. This is something that the founders inherited right at the time of inception. Micromax was founded in 1991 by Rajesh Aggarwal who was a distributor for computer hardware of brands such as HP, Dell and Sony. For each category of products, the distribution channel varies.
For feature phones and tablets, the company has a three-tier distribution set-up, and for smartphones and LED TVs, it's a two tier model. The three tier set-up includes 80 large partners, 2,500 small partners, followed by a network of 125,000 small retail outlets spread across the nation.
Telecom industry experts also believe that the company has managed to understand the Indian consumer psyche much better than the multinationals. "Entry level tablet is the real battle ground in India. There is a huge amount of activity in the tablet space, especially since the government initiated Aakash tablets. The users are aware that these are not some fancy gadgets but entry level offering. That is where Micromax has gained market share," says Venu Reddy, Director IDC.
Similarly in the smartphone segment, the company has tried to include applications that will make its products stand out despite the low price stamp. "For us, smartphone is not about plain-vanilla features. We will never compromise on the user experience, and yes we have also tried to control the price points. That too is important if you want more and more users for our products," says Sharma.
The company does have many firsts to its credit when it comes to the mobile handset market. For instance, the 30-day battery backup, dual SIM phones, Querty keypads, dual reception mode handsets, universal remote control mobile phones etc – that too at a very low price point.
If this sounds too good to be true, listen to Faisal Kawoosa, Lead Analyst, CMR Telecoms Practice. Kawoosa says the key to keeping the prices down is a tight and efficient supply chain management, which involves vendor selection and volume play. "The key aspects in managing cost in any handset are the features that a vendor is offering, the choice of vendor partner and the volume play. While there are several tech components to a tablet and handset, the key elements include memory, display, chipset, battery and of course the brand value. So players who are catering to the lower segment will focus on these issues". In case of Micromax, the company works with chipmakers such as Mediatek, MStar (which is now merged with Meditek), and Qualcomm. Also several players such as Qualcomm and Samsung bundle components such as camera, sensors, memory, display drivers and reference design into the chipsets, which bring down the price.
In the smartphone segment that is considered to be one of the fastest growing segment in India, Micromax has sales of 100,000 to 150,000 a month. But this is a segment where it is pitted against strong players like Samsung, Nokia and HTC. Like several of its global peers, Micromax too is trying to add unique applications. After Apple's Siri, a voice-controlled personal assistant, Micromax came up with Aisha with the same features. Last month it also launched a mobile messaging application HookUp. "It's unlike any of the messaging services as the user using HookUP can also send messages to a person who does not use the application," adds Sharma.
"The biggest differentiator of Micromax compared to other domestic or Chinese players is the connect it has created with its brand. Among the local players, it is the strongest brand. While Nokia continues to rule in the overall mobile handset market, Micromax has emerged a strong domestic player. It will be interesting to see how Micromax breaks the barrier in the smart phone segment," says Anshul Gupta, principal research analyst, Gartner.