Micromax has just launched a new budget smartphone in India, the Canvas Spark, which offers the latest Android OS for a rockbottom price of Rs 4,999. The company was crowned India’s number one smartphone manufacturer by research firm Canalys for the Oct-Dec 2014 quarter, a report then countered by Samsung. But the Indian smartphone market has changed drastically in the last couple of quarters following the entry of new players like Xiaomi, Asus and Lenovo to name a few. Shruti Dhapola of IndianExpress.com spoke to Micromax CEO Vineet Taneja on how the company plans to stay ahead of the competition. Excerpts
What are your expectations for this year? IDC noted that the Indian smartphone market contracted in Q4 of 2014? Do you believe that was an aberration?
The market is bouncing back. We’re seeing that this month. Also, these guys look at import data — they don’t take into account the pipeline that is expanding and shrinking. For instance, if they estimate the market wrongly, people import more and a lot of inventory might be left in warehouses. But if you look at consumer tech data, that is quite robust. We’re not worried about that.
By launching a very affordable smartphone, would you say Micromax is going back to its roots? Other than the Canvas Selfie, which was around Rs 15,000, we’ve not seen higher-priced offerings from you. Is there a reason for this shift in strategy?
We’re now big enough to follow a portfolio strategy. But, the insight is very clear: smartphones in the sub-Rs 7,000 category are growing at twice the rate as the bracket above it. That’s clear. We are leaders in that segment. We are number one in the mass smartphone market and it’s the right space to be in.
Of course, that doesn’t mean we will ignore other segments. We will share plans for those later. Today, we’re making sure that we don’t miss out on this fast-growing segment.
Just to illustrate, almost 2 million smartphones are sold in the mass segment, and people say that’s big. I feel that’s the tip of the iceberg: 10 million feature phones are sold even today and there are 180 million smartphone users in India. Half of them are using very old Android or basic smartphones or Symbian. Even BlackBerry is included in this.
All these old smartphone and feature phone users are ready for an upgrade and we feel there’s a huge opportunity there. We are very, very bullish on this. There’s also good news on the data side with spectrum auctions being done. We know 3G and 4G will come and we’ve launched budget 3G devices in the last three months. With that strategy, we are introducing the Canvas Spark at Rs 4,999.
We’re also seeing a lot of competition from the likes of Xiaomi, Lenovo, Asus, etc, which are offering smartphones in the same price range. How do plan to stand out?
Competition is not new to India; it’s always been there, either with big Korean names or Chinese companies. We continue to remain innovative and value our relationships. For instance, for this smartphone, the pact with Snapdeal was done five months back. They have a commitment and so do we.
We have differentiation strategies. The specs game will lose its charm beyond a point. We will start differentiating our products first in terms of look and feel. We’ve set up an R&D team in Beijing and Bangalore. So, the Canvas Spark, in hardware terms, has been designed by the Beijing team.
The second part of our strategy is to build the service business, where we start participating in the larger mobile internet ecosystem.
The third leg will be to head outside India and create scale in other developing countries.
How has the response been outside of India?
In Russia, it’s early days. You know the economy went through a turmoil, so things have been turbulent overall. But other markets like Bangladesh, Nepal and Sri Lanka are very good businesses for us.
One of the new attractions of Android is the ability to customise. Does Micromax plan to extend this to the Canvas series, or will Yureka be the only brand offering customised ROM?
Yu is where there’s complete customisation, all the way. We do some level of customisation even on stock Android, but I don’t think in mass smartphones it’s the most important thing. Consumers need some familiarity and while we do some stuff at the kernel level and application level, completely changing the UI would be tough for a new customer to adapt to.
There have been reports that Micromax is up for sale.
We are looking for strategic partnerships. We’re not doing a sell-out. This is a company that is owned by four founders and they are not going anywhere.
Finally, who would you say is Micromax’s biggest competitor?
Well, we are neck and neck with Samsung. Then there’s a distant third and a distant fourth.