Micromax, Karbonn, Lava to target sub-Rs 10,000 smartphone segment in yet another comeback

According to a report by The Economic Times, these brands want to take over the entry-level price segment as they feel customers these days don’t have much of a choice. The renewed interest comes as China-headquartered OEMs, which account for more than half of the Indian smartphone market right now, look away from the affordable price range to sell more expensive devices — for a variety of reasons. Chinese OEMs have nearly vacated the sub-Rs 8,000 segment.

As per the report, Karbonn is looking to launch a phone at Rs 4,999, while Micromax could enter the market with a device priced at Rs 5,999. Lava launched two new 5G smartphones in the past three months — Blaze 2 5G at Rs 8,999 in April, and Agni 2 5G at Rs 21,999 in May.

Pradeep Jain, managing director of Karbonn parent Jaina Group, told ET that there is “no better time” than now to target smartphone launches. Industry experts also opined that 4G connectivity is likely to remain in the market for at least three more years, which could give the likes of Micromax and Karbonn a potential fillip.

Micromax, Karbonn and Lava comeback

Up until nearly a decade ago, Indian brands accounted for nearly half of the entire smartphone market, which was at a nascent stage and growing rapidly. The advent of Xiaomi, followed by the likes of the entire BBK Electronics conglomerate — OPPO, Vivo, OnePlus, Realme and iQOO — saw the latter use their global scale to undersell devices. In simpler words, the likes of Micromax, Karbonn and Lava simply did not have the kind of scale or size that their China counterparts did.

As a result, Chinese brands overtook the likes of Micromax, Karbonn and Lava, which eventually lost all of their footing in the market. From nearly half the market, data from Counterpoint cited by ET state that the domestic brands today account for less than 1 percent of the market. In contrast, Xiaomi held the number one smartphone brand spot in the country for five full years — from January 2017, until the end of last year. During this time, on average, it held more than a fifth of the market by itself.

Now, the domestic brands are looking to make a comeback. According to the ET report, these brands are looking to cash in on Chinese brands looking at higher price points, driven by factors such as an increasing demand for premium phones, increasing usage cycles, and of course, 5G.

Could it be possible?

It is important to note that demand in the sub-Rs 10,000 price segment is waning, while the average selling price (ASP) of smartphones is going up. A Mint report from January this year said that the ASP of a smartphone in India crossed the Rs 20,000 mark last year, while the usage cycle of a smartphone has gone up to nearly 2.5 years — up from six months about eight years ago.

ET cited Lava president Sunil Raina, who said that the company has grown 2x last year, while its 2023 sales are already 3x that of last year.

However, the above-mentioned factors could make it tricky for the domestic brands to tap the domestic market the way it once did — especially given the wide range of affordable financing options for buyers across online and offline retailers.