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Cellphone firms bet big with mass-market handsets

Cellphone firms bet big with mass-market handsets

Author | Source: Business Standard | Saturday, Dec 03,2005 9:06 AM

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Cellphone firms bet big with mass-market handsets

Motorola, Philips and Nokia may launch the Rs 1,000 cellphone soon.

With subscriber addition drying up in older cellphone markets in Western Europe and North America, the bigger players in the mobile phone industry are turning to the emerging markets – India and China to keep growth rates high.

Market leaders Nokia and Motorola, who account for more than 51 per cent of the phones sold in the world today, continue to bring out cheaper and cheaper models in the market with basic features like voice and SMS only. “Mass-market handsets will undoubtedly play a large role in the emerging markets,” says Motorola’s vice-president for “Hi-growth Markets” Allen Burnes.

“Four billion people worldwide have yet to make their first mobile phone call and India represents a large opportunity in driving the overall handset market, and we intend to be a large part of the successful mobile handset adoption by the masses,” he adds.

Motorola presently invests nearly 10 per cent of its total sales revenues, one of the highest percentages in the market, on research on bringing down manufacturing costs of its basic models and adding new features to its higher-end models and has lined up an ultra-cheap C11 range to be rolled out starting middle of next month.

Exp]ected to retail for around $25 (Rs 1,150), the cheaper ones in the line up will be among the most affordable phones available anywhere in the world. The company plans source the C115, the volume driver in many markets, directly from a manufacturer in India from middle of next month.

Nokia, the dominant player in the Indian market, too has the entry-level, voice-and-sms models in its crosshairs. Just a month ago, it released an updated version of its hugely-successful 1100 model, long after other companies have either eliminated monochrome models from their line-ups or stopped coming out with new models in the segment.

Explains Nokia’s director for product communications for mobile phones, Marianne Holmlund said: “In September, we passed the 2 billion subscriber mark worldwide and out of the next billion, to be sold out by the end of 2009, half will be from the Asia-Pacific alone. Besides this, another 20 per cent will be from the Middle East and Africa and (only) the remaining 30 per cent will be from the rest of the world.”

Another player, less dominant in the handset market, but which accounts for almost 15 per cent of the chipset business (the component accounts for more than half of the instrument-cost in the low-end), is Philips.

According to company sources, it will announce the launch of its breakthrough single-chip technology next month. The new chip-set, expected to be made available to equipment manufacturers for just $5, driving the cost of the final product to under Rs 900 ($20).

The company’s optimism about basic models is also reflecting in the sales figures as well.

According to the latest third-quarter market figures released by research firm Gartner, 9.2 crore phones were sold in the emerging markets from Eastern Europe to China to Africa while North America, Western Europe and Japan accounted for only 8.75 crore units sold during the period.

Tags: e4m

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