Why Chinese firms will find it difficult to sell phones in India after certain point

Chinese invasion in the Indian smartphone market is making mobiles more and more affordable. With shrinking profits from smartphone business, this has become a big worry for domestic players. However, the bigger issue now lies in convincing people to buy high-end Android smartphones.

The constant price war has forced each brand to somewhat dig its own grave by setting a certain price threshold. This means brands like Micromax, Intex, Xiaomi, LeEco, Coolpad, OnePlus and others will find it difficult to sell models after a certain price point.

After all, it would take a lot of effort for someone like Intex to sell a handset model at or above Rs 20,000 or for Xiaomi to sell something above Rs 30,000. Each brand now has preset a price limit for themselves (knowing or unknowingly) and consumers are forcing them to stick to that.

It is all the more difficult now for brands to have hero models in every price range -something Nokia and Samsung had mastered previously.

The market dynamics have been successful in making consumers believe that expensive Android smartphone make little sense and offer little additional value, thus the death of flagship Android smartphones. Of course, there is still some traction but the thought of "Why spend Rs 50,000 on a flagship when you can get an equivalent handset for half the price?" has taken over.

Are consumers eager to buy a new Android phone every year, anymore?
Android smartphones get old faster. Shorter product lifespan is obviously good for companies. But, are consumers willing to buy a new Android phone every year? And even if they are, most are slowly cutting down their budgets, as now you get good features in a smartphone at a very reasonable price. Instead of spending Rs 50,000 on a new smartphone every year, the same can be spent over a couple of years on multiple purchases.

Another reason for this can be attributed to the belief that Android smartphones mostly fail to stand the test of time - battery life, device slow down or general wear and tear.

In India, people still take pride in owning a two-year-old iPhone 5S or even flaunt the iPhone 6. But does the same hold true for older Android flagships? In our opinion, not really.

Hardware saturation and Nokia mentality

While more cores, megapixels and memory were enough to sell smartphones in the country half a decade or so ago, it is no longer the case anymore. Instead consumers have already started to question the purpose of having 6GB RAM, 20MP camera and of course, 10-core processors. Hardware is no longer the game changer.

Also, with custom skins, brands have somewhat killed the excitement of upgrading to the latest Android version. The promise of providing timely upgrades, something very few Android players offer, cannot be the single-most important reason to attract consumers.

On the other hand, changing smartphones occasionally is not a trend any longer. The average lifespan of mobiles is around 14 months, people replace handsets for mostly reasons like new hardware, the present handset fails to deliver desired performance or a good buy back scheme to upgrade to new handset come along.

The age of Nokia has instilled in consumers that mobile phones should last for at least three years. It is something people were used to earlier, but not anymore. Slowly they have come to realize that stepping up to the smartphone trend is an expensive hobby and some even considers it as a waste.

With the Nokia-days long gone, people are still hunting for that one smartphone model, which could offer everything with years of lasting. Basically, anything that would remain new for a longer period and work without performance hiccups.

Why not opt for an iPhone instead, if I want an expensive phone to flaunt that will also last longer?

Apple products continue to have the most "aspirational" value attached to them. This is what is still driving iPhone 5S sales in India. With the somewhat death of the expensive Android flagships, consumers might be better off opting for the latest iPhone. Why you ask?

The reason is plain. Consumers are slowly realizing their Nokia dream with the Apple iPhones. It remains new for a longer period. Also, then there is the case of iPhones not slowing down over time and it can easily be used for up to three years. This is probably the biggest reason for people, who want to buy an expensive Android phone, to shift to an iPhone.

With the current dynamics, Apple might aim to be the next Nokia in the expensive category, but it would be hard to displace Android in the mid-segment.

Source: techgig.com