Analysts tie Samsung's success in India to low-end devices

NEW DELHI: Samsung Electronics’ share in India’s smartphone market is both growing and shrinking, based on different metrics.

Samsung has expanded its volume market shares to 38% in last quarter of 2013 from 32.7% in the first, according to latest IDC data. Based on value, its share fell two percentage points, though it still remained massive at 43%.

The fall in value market share indicates the price pressure the company is facing and also that the contribution of higher-priced devices to its overall sales is probably slowing.

Still, analysts recommend Samsung to focus on low-end devices by increasing the range of products as future growth will be in this segment.

On Tuesday, the Korean company forecast a second straight quarter of lower profit, hurt by falling smartphone prices globally. The company gets about two-thirds of revenue from mobile phones globally, and the performance in India, the fastest-growing smartphone market, is key to its handset business.

Jayanth Kolla, co-founder and partner at telecom research firm Convergence Catalyst, forecast a tough 2014 for Samsung. “Their market share has hit a plateau. The delta in innovation in smartphone space is reaching its maturity. That’s the reason why others are catching up with Samsung,” he said.

In India, local brands Micromax and Karbonn have expanded their market share in the past quarter over the year-earlier period, the IDC data show. Vineet Taneja, country head for mobile and IT at Samsung, said the company’s sales more than doubled in 2013 and that the strong growth continued in the just-ended quarter. “We have maintained our overall leadership position in smartphones; we enjoy an even higher leadership in premium smartphones,” he said.

The smartphone market in India is expected to double in 2014 from last year. But value may not grow that fast as some analysts expect prices to fall, to as low as Rs 2,500.

While local brands will continue to get traction in 2014, market watchers say Nokia, once the leader in the handset market, is regaining some of their lost ground with affordable Windows and Android devices.

Chinese vendors like Lenovo are also expected to strengthen their India business.

To take on this increasing competition, Samsung will have to up the ante and launch more products, analysts say.