Will Indian Smartphone Suppliers Get Home Territory Back?

Now that the title of the fastest-growing smartphone market has been passed on to India from China, it seems logical that Indian mobile phone brands would be making significant market-share gains.

After all, the Chinese market has been dominated by global and domestic Chinese brands. In India, however, major Indian smartphone suppliers were absent from the top market-share list in their home territory during the first quarter of this year.

The Chinese suppliers are able to scale production, manufacture in India, focus on low-cost product features, and, perhaps most importantly, quickly accommodate service providers’ tech advances. Since the fourth quarter of 2016, Chinese players have been dominating the Indian smartphone market. And in the first quarter of this year, Chinese smartphone suppliers Lenovo, Oppo, Vivo and Xiaomi together took over half of the Indian smartphone market. Local Indian suppliers such as Micromax were left far behind during the period.

Of course, Chinese suppliers come to the market with the know-how to operate in a densely populated market with a demand for lower-priced hardware. To that end, they’ve been able to focus on product features such as increased storage space and better cameras for selfies to attract the price-sensitive consumers in India. In addition, they have added manufacturing facilities in India to keep the production and distribution costs down.

But perhaps the most significant factor has been the faster adoption of 4G technology. Starting late last year, Indian wireless networks began rapidly moving from 3G to 4G networks, and domestic handset makers were slow to respond. Because it took years to shift from 2G to 3G networks in India, the sudden jump to 4G surprised the Indian suppliers who had a large 3G portfolio. At the time when wireless carriers began rolling out 4G networks, Micromax’s smartphone portfolio could only support 3G transmissions.

Now Indian smartphone suppliers are trying to catch up. Most domestic brands have switched their product portfolio to also support 4G transmissions. They are also focusing on developing their products with more popular features, and adding more physical stores for consumers who aren’t used to online shopping. Also, Indian suppliers recently sought government protection for local brands to compete with Chinese and other international smartphone suppliers. A recent Indian government directive requires foreign makers to provide “proof that their devices are secure,” according to a recent report from DigiTimes.

Can the domestic smartphone suppliers catch up in what is arguably the hottest smartphone market in the world? Only time will tell.