Smartphones & Tablets in India

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    SMARTPHONE MARKET & TRENDS

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    Introduction

    Smartphone Market Overview

    Drivers & Challenges

    Market Opportunities

    Market TrendsSmartphone Player Profiles

    Smartphone Price & Specifications

    Strategic Recommendations

    Distribution & Retail

    Tablets Market Overview

    Growth DriversContent Scorecard

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    Market

    There were around 11 Cr Smartphone units sold in the first 2 quarters of 2012

    Sales for Micromax, LG, RIM among other declined, Samsung continued its

    dominance and Nokia held on to its leadership position by a thread.

    Android continued to increase its OS market with a market share of 70.8 %

    Drivers:

    Increase in disposable income

    & change in consumer behavior

    Introduction and spread of 3G and

    other next generation cellular networksConstant reduction in Prices

    Challenges:

    Low penetration in rural areas

    Security & Privacy concern

    Battery life

    High 3G tarrif plans

    Dual sim smartphones were introduced and are becoming popular

    Rise of the Phablet

    High resolution touch screen interface

    Multi Core processors

    HD recordings & high resolution cameras

    Drivers &

    Challenges

    Market

    Trends

    Smartphone

    Player ProfileSAMSUNG NOKIA APPLE Inc

    HTC Research in Motion LG Electronics

    MAJOR PLAYERS

    EXECUTIVE SUMMARY

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    SMARTPHONES MARKET OVERVIEW

    Jan-12 Feb-12 Mar-12 Apr-12

    40.1 41 39.8 36.6

    24.6 22 25 28.1

    9.7 9.6 8.8 9.510.3 12.2 12.9 12.615.2 15.2 13.6 13.3

    Monthly Price Class % Share

    Samsung grew its market share to 48.2% while Nokia

    with its Lumia phones showed steady signs at 24.2%

    Android continued its dominance, Microsoft had very

    limited penetrationsIt has been 7 quarters since the release of Windows

    Phone and the platform's market share is still

    languishing below 2%

    People are willing to pay more for smartphones

    Smartphone market in India is driven by youth demand and

    falling prices of smartphone devices

    Gartner Sep 12

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    1 in 10 smartphone user in urban India lives in a Metro

    Over 27 Million smartphone users in urban India

    Nielsen July 12

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    USAGE

    PATTERN

    Smart phone usage between the age group of 18- 29 is the highest.

    56% of smartphone owners in India prefer accessing Internet multiple times a day through their

    phones.59% of males access the Internet more through smartphones versus 48% of usage by females.

    78% of smartphone owners indulge in searching from their device, 77% of smartphone users in India

    like listening to music on their smart device and close to 35 % of smartphone owners either

    read newspapers, book and magazines or watch TV and close to 33% enjoy playing games.

    97% of smartphone owners are heavy users while at home. Men have a higher usage of

    smartphones when at work with close to a figure of 80% as compared to 71 % women at work.

    While people are engaging more into online shopping it is found that 40% of smartphone owners do

    not feel secure to purchase online through their smart device and prefer PC/ laptop for the same.

    Google Survey July 2012

    Nielsen

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    Factors favoring growth

    High disposable income among the target age group

    Continuous fall in Prices

    Introduction of New entrants in the market

    Availability of apps

    Adoption of 3G and wifi

    Social networking

    Connected world philosophy

    declining smartphone prices in the past year and growth

    in the variety of models available has spurred sales of

    both low-end smartphones in regions like Asia Pacific

    Wayne Lam, IHS

    CC India Feb 12

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    Social Networking properties

    (apps/sites) are the most accessed,

    second only to search

    - Facebook leads the list, Google+

    comes in second

    - A whopping 93% of Android

    Smartphone users in India use

    social networking on their

    smartphones.

    Nielsen Informate May 12

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    Google Apps are dominating

    in every segment except in

    social media and chat, where

    facebook and Nimbuzz aredominating respectively.

    Google apps comes first in

    time spent categories

    including Streaming videos,

    GPS, email, and search. In

    video streaming, YouTube

    consumes 94% of time , while

    86% of the time spent on GPS

    is with Google.

    Nielsen Informate May 12

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    Challenges

    Low penetration in rural areas; Tier 2 & 3 cities

    Adoption of 3G continues to grow at a slow pace3G services and availability offered by Telcosremains to be below parHigh tariff plansBattery Life

    ET Feb 12

    Gartner Sep 12

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    Market Trends

    Total Smartphone Sales (000)

    sep12

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    Break up Units Sold (000)

    GFK Nielsen May 12

    Break up Market share

    Gartner Sep 12

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    SMARTPHONEUSAGE-ACROSSOS

    157 193 138 111 76

    BASE 6113 482962882 2887

    With a time spent of more than 3 hours [193 mins] daily,Android users continue to dominate the Smartphone

    usage in May 12 as well. With almost an hour difference, Symbian users followed next[138 mins]

    The share of time spent on Brows ingwas highest amongst Windows Mobile users while Blackberry users

    continue to have the highest share on Communicat ionbased activities.

    As has been the trend, Symbian users continue to be the main users of Entertainment related activities.

    Android users spent close to one fourth of their total time on Appl icat ions [23%].

    Time spent

    [Mins/ day]

    BROWSING COMMUNICATION ENTERTAINMENT PHONE MANAGEMENT APPLICATIONS

    All Figs in %

    Nielsen May 12

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    Indians and the Dual Sim

    obsession

    over 85 models among 20+ brands

    71 million unique subscribers in India

    who use multiple SIM cards accounting

    for around 61% of the whole mobile

    phone sales in the country.

    youths who are college students,newly employed or working

    professionals

    7 out of 10 of those multi-SIM card

    users polled into the survey intend to

    acquire a dual-SIM mobile phone soon

    Nokia now leads the multi SIM

    mobile phone market with 30%

    Samsung trails at 2nd position with

    16%

    HTC and Sony have entered the dual

    SIM phone market Nielson

    GFK Nielsen May 12

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    The larger than tablets gadgets are slowly

    finding favour with clients given their diverse

    functions

    They stand out on the mobile computing scene,

    with their big screen sizes and extra capabilities

    For the predecessors and upcoming phablets,

    the market is responsive, with the promise of new

    user experience

    ABI Research expects 208 million phablets to sell

    in 2015.

    10 Million galaxy notes have been sold

    worldwide

    With rich media consumption on the rise on

    mobile devices particularly as we get faster 4Gnetworks and more Wi-Fi networks to supplement

    them a larger display is desirable

    several domestic manufacturers are also foraying

    in the category with low cost phablets to cater to

    the needs of the budget conscious Indians

    "One of the chief drivers for phablets is the amount of timepeople use their smartphones for Web browsing, reading articles,and newspapers on the go, or simply navigating their journeys,"said senior analyst Joshua Flood. - ABI

    Why scroll and zoom when a larger display

    minimizes such efforts? The rise of the

    Phablet

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    Price Class :

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    Feature Price Index Multi coreCamera

    RAM

    LCD

    Battery

    Wifi,3G

    Design

    5K 10K 15K 20K 25K

    F

    E

    A

    T

    U

    R

    E

    S

    PRICE

    v

    v

    New capabilities include technologies that could change how

    users interact with the devices and how the devices interact with

    the environment

    near-field communications (NFC), high-definition audio (HDA),

    3D computing, future generations of voice recognition, artificialintelligence, advanced video compression, gesture sensingand

    olfactory sensing (artificial nose).

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    Telco AllianceGeography Distribution

    Nielsen May 12

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    CONSUMERDEMOGRAPHICSFORPREMIUMSMARTPHONE

    Mumbai Pune Chennai

    Businessman Youngsters Students

    Youngsters Working professionals Youngsters

    Working professionals Working professionals

    18-25 Years 18-25 Years 18-25 Years26-45 years 26-45 years

    Income Above Rs 20,000 Above Rs 10,000 Above Rs 10,000

    Location South East Central

    Work

    Ages

    Nielsen May 12

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    May 12

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    Retail Strategy

    May 12

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    May 12

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    May 12

    E l i T h l i

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    Evolving Technologies

    OVERVIEW OF TABLET MARKET

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    OVERVIEW OF TABLET MARKET

    Tablet PC Market: Worldwide

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    Tablet PC Market

    Tablet computers will accountfor 23 percent of all PC salesby 2015*

    Worldwide Tablet PC marketsize in 2010 was nearly US$ 9Billion and it is anticipated thatTablet PC unit sales will cross100 Million Units by 2015.

    Source: Forrester Research report

    Tablet PC Market: Worldwide

    Gartnersays Media Tablets

    sales to reach 119 Million

    Units in 2012.

    T bl t M k t Si I di

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    Tablet Market Size - India

    Brand

    Market

    Share

    Vol

    (p.m.)

    Vol

    (p.a.)

    ASP

    (INR)

    Val / INR Cr.

    (p.m.)

    Val / INR Cr.

    (INR)

    Apple iPad 45% 18,000 216,000 30,000 54 648

    Samsung Galaxy 25% 10,000 120,000 20,000 20 240

    Blackberry Playbook 15% 6,000 72,000 6,000 4 43

    HCL 6% 2,400 28,800 8,000 2 23

    Karbon 2% 800 9,600 6,000 0 6

    iball 2% 800 9,600 6,000 0 6

    Others 5% 2,000 24,000 5,000 1 12

    Total 40,000 480,000 20,370 81 978

    Gartner May12

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    TABLETMARKETANALYSISOVERVIEW

    30

    20

    6

    8

    66 5

    (INR in thousands)

    Apple iPad

    Samsung Galaxy

    Blackberry Playbook

    HCL

    Karbon

    iball

    Others

    Average Selling Price

    45%

    25%

    15%

    6%2% 2% 5%

    Market Share

    Apple iPad

    Samsung Galaxy

    Blackberry Playbook

    HCL

    Karbon

    iball

    Others

    Apples iOS leads the Tablet operatingsystem marketWith an increase in adoption of tablets in theemerging markets the share of Andr oid OS isexpected to growsignificantlyOf over 35 tablets launched in India, most ofthese run on Andro id OSSamsung g alaxy tab is the leader amongstall Android based TabletsApart from OS, Hardware features such asMemory, USB su pport and Battery l i feplaysa key roleOf all the retail channels that sell Tablets,

    Large form at retai l stores sell the most

    unless there is a significant drop in the prices, theadoption will remain in the niche circles **Gartner

    Based on Secondary research, source :world wide web

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    GROWTHDRIVERS

    Faster DataConnectivity

    User

    Experience

    Relevant

    Content

    RETAIL

    EDUCATION

    ENTERPRISES

    TELECOM

    Affordability

    User

    Experience

    Aspiration

    Utility

    Tablet

    Value

    Propositio

    n

    One of the key reasons for introduction of low cost smartphones and Tablets and therebyincrease in the sales of players like Micromax, HCL among others is the aspirat ionalvalue attached with these gadgets.

    IMPORTANT

    -Rich interact ive

    UI

    -Screen Qual i ty

    -Processing

    Power

    -Battery Life

    -Appl ica t ions

    -Content

    -Ease of use

    Based on Secondary research,source : world wide web

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    CONTENTSCORECARD

    84

    5852

    4739

    0102030405060708090

    Top Categories

    Volume (000)

    0%10%20%30%40%50%60%70%

    68%62%

    54% 54% 52% 52% 51%

    Top Utilities

    Tablets predominantly are being used for brow sing & entertainmentAdoption in education sector and for young parents is visible

    While retail users specifically use it for enterta inment and info purposes, enterpr isesegments it for its mobility and cl ient presentat ionsLack of consumer centric file management systems and dif f icu l tyto composespreadsheetsdoesnt make it conducive for adoption by enterprises on a large scale.

    Based on Secondary research,

    source : world wide web

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    RETAILUSECASES

    Corporate

    Professional

    s

    TechSavvy/Gadget

    Crazy

    High EndYouth

    MassMarket

    Portability

    Connectivity on the

    move

    Email & InternetAccess

    Client

    Presentations

    E-book reader

    Writing &

    annotations

    Applications

    Connectivity on

    the moveEmail & Internet

    Access

    Multimedia

    Gaming

    ApplicationsEmail & Internet

    Access

    Multimedia

    Gaming

    MultimediaBasic Internet &

    email access

    E U C

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    ENTERPRISEUSECASES

    Media Tabletshave a role to

    play in the

    enterprise

    segment.

    Education

    sector has

    shown earlyadoption with

    govt taking

    various initiatives

    to bring in a low

    cost tablet

    Many

    industries are in

    a pilot mode Weather Briefing Fight charts Billing

    Check-ins

    Airport directory

    Curriculum Interactive Apps

    Online Streaming

    E-commerce

    POS Online Catalogs

    Digital Signage

    Digital imaging

    Billing Patient Education

    Records/MIS

    Healthcare Retail

    AviationEducation

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    POINTSTOREMEMBER

    The Indian tablet market is seeing good growthbut experts warn that the industry might find itdifficult to sustain this growth unless playersmake an effort to develop an ecosystem.

    Based on Secondary

    research, sourc e :

    wor ld wide web

    About 350,000 units of media tablets weresold in the first quarter of 2012 alone,compared to the 475,000 units in the calenderyear 2011**Cyber Media Feb 12

    availability of highly digitized content and a good 3G

    and 4G network coverage are the key ingredients of theecosystemThe quality of experience is what will define asuccessful tablet.

    Education and healthcare will be the key sectors wheretablet adoption will continue to witness a good uptake

    unless there is a significant drop in the prices, the

    adoption will remain in the niche circles **Gartner

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