India’s smartphone market is a vibrant mix of big brands and low cost players. Samsung is the clear leader when it comes to smartphones, but Indian manufacturers and distributors are catching up to the Korean company through competitive pricing on similarly-speced devices.
Of course, Samsung's top spot hasn't come about by just producing a smartphone with great specs. There is a whole lot more behind the success of its product lines. For one, even before Samsung brought its A-game to the Android table, it was an established brand in the consumer electronics industry. As such there was a great deal of awareness among Indian customers about the brand. This was, of course, further helped by the raw performance of its phones, innovation in terms of display technology and processing power, and feature-filled software.
The Samsung Galaxy Note 2 is one of the most popular Android smartphones
In the smartphone race, Samsung was the thoroughbred and galloped ahead with the lead. A lead which it has not yet relinquished. The fact that Samsung already had expertise in various allied fields only served to push it further ahead.
Then there is the question of resale value of Samsung's phones. A recent advertisement called for people to trade in their smartphones for an iPhone. So we decided to check what price the listed dealers were giving for the existing top-end phones as well some from last season. Majority of the dealers gave the best exchange price for Samsung handsets. The best offer received for the 2011 flagship Samsung Galaxy S2 was Rs 12,000, while its current price varies between Rs 23,000 to 26,000. Considering its vintage value, the exchange price for a handset in good condition is pretty decent. Exchanging Samsung's current flagship, the Galaxy S3, would get you around Rs 22,000 and a used Galaxy Note 2 would fetch around Rs 25,000. Again, this is a great deal considering their current price of Rs 30,000-32,000 and Rs 35,000-38,000 respectively. So the resale value of its phones is a great advantage for Samsung.
Moreover, a non-functioning or bricked Samsung phone can be easily taken to a Samsung service centre, of which there are quite a few in the country. Samsung even has dedicated service centres for only smartphones, which ensures speedy returns of handsets. The company’s range of Smartphone Cafes is also a great way of showing off its devices through informed salesmen, a cue Samsung took from Apple stores around the world.
At the moment, low-cost manufacturers are flooding the market with Android smartphones that are similarly speced and have designs bordering on rip-offs. One reason for this is manufacturers just rebadge phones manufactured in China or just purchase pre-fitted SoC kits and then build a chassis around it. This makes them susceptible to disruptions in the market. Let us assume that RIM's BB10 is a huge success and the Canadian company decides to ride the success by licensing its OS to other OEMs. Google does not charge for Android, but OEMs have to pay to allow their devices access to the Play Store officially. RIM will not, in all likelihood, allow manufacturers to take up its OS free of charge. In a situation like this, Samsung has all the right ingredients to succeed in a world where BB10 is king.
Even if this situation seems far fetched, there are other factors in play. Samsung has the capability and the financial resources to produce flexible displays or continually expand on its SoC features. In 2012, Samsung invested nearly $12 billion into research and development. That seems like a ridiculously large sum even when compared to other leading technology giants. India’s leading smartphone makers, on the other hand, have very little investment in the R&D sector. Samsung is the market leader in production of RAM and is a pioneer in high-capacity NAND Flash memory, which will impact the smartphone industry greatly in 2013 as manufacturers look to expand in-built storage on their phones. Advancements in these fields will leave Samsung's India-based competitors by the wayside.
Samsung's new Exynos 5 Octa chips are expected to be featured in its next flagship smartphone (image credit: Engadget)
These are big advantages in Samsung’s favour. According to the latest figures released by market research firm GfK, the Korean company has a 45 percent share in the smartphone market. While there is no doubt that some low-cost makers will sway a few customers away from Samsung’s stable thanks to attractive pricing, we don’t think there is any reason for Samsung to hit the panic button.