The Phone Urge

There is a craze to change phones in the urban communities of India.

The change is of course for the better, no doubt about it. Folks are moving from simple cell phones to smart cell phones with big screens. The phone makers (at least a couple of them) are laughing their way to the bank.

The hottest phone maker in town is Samsung, not Apple. Yes, you guessed it wrong, Apple is not the leading smart phone supplier to the Indian market, though the latest statistics for sales in the U.S. market shows that Apple is ahead of Samsung.

But, first let us talk about this urban urge. Why do people want to change their phones so often (as often as once in six months or one year at the most) ? Haven’t they just invested on a pretty good phone only a few months ago ? What is the need for the change, despite the change costing much more money than the previous change ?

Well, we are in the middle of a revolution in India – a digital revolution which is playing out in the major metro markets around the country. People want to be seen with latest gadgets, especially the cell phones. I will write about the digital tablets in another blog post, coming up soon. If someone young is still using the old generation of cell phone, he or she is considered to be out of sync. If someone old but business-looking is still using the earlier generation of cell phone, he or she is surely out of sync with what the business world is currently using.

The trend is clearly and firmly towards advanced smart screen, high-end cell phones. These phones start somewhere around USD 200 and are available all the way up to USD 1000 in the Indian market. Most people are anyway used to the USD 100 to USD 200 range for quite some time, and so it is not a big problem for them to spend another USD 200 or USD 300 for an advanced phone which appears to be the talk of the town. It is very important to have that phone.

With increased affordability, and with the pressure to be seen in sync with the times, it is apparent that the demand will only be going up, month after month. Many people, especially the business folks, have two cell phones, or a single cell phone with dual SIM cards. Now, they upgrade to an even more advanced phone which seems to be able to do much more with a 1 GHz processor and some 4 GB memory !

Of course, the less said about this urge in the youngsters’ market, the better. They seem to be on a constant push towards going for a better cell phone all the time. What is that they are looking for ultimately ? They seem to be wanting more and better functionality and features all the time. That is the way their world moves – faster, better and bigger.

India is a great market for cell phones, not the least because it is willing to pay global prices for global brands. Profits should be good, but I don’t have that data. The phone makers keep on releasing a barrage of advanced phones continuously, and that is only causing confusion.

Most folks buy their phones based on hearsay rather than on detailed analysis, and that helps the well-marketed brands such as Samsung. I prefer the HTC brand, but their marketing is not as strong as that of Samsung. Apple is nowhere to be seen, the only major reason some Apple iPhones are seen at the airports is because these users bought it overseas. The locally available Apple iPhones are excessively priced, putting off most buyers.

Well, there you go, cell phones are ringing the cash registers in India at an all time high, at a higher dollar realization rate. Welcome to ever bigger screen phones.


Vijay Srinivasan
4th February 2012


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