Competition Issues in India's Mobile Handset Industry
Kathuria, Rajat; Kedia, Mansi; Bagchi, Kaushambi | October 2019
Abstract
Telecom and information technology have transformed the way we live. Mobile phones have been the key to this revolution in India. It is now the second largest smart phone market globally. In 2010, UN reported a tragic irony - India had more mobile phones than toilets. While the access to household toilets has risen sharply, the euphoria around mobile phones hasn’t withered either. At the end of 2018, the estimated number of smart phone users in India was 337 million, compared to 2.53 billion users worldwide. One would imagine that the exponential increase in cheaper smart phone models would displace the market for feature phones. To the contrary, feature phones continue to dominate the Indian market, with over 50 percent share (by volume), driven by a preference among users in small towns who find little value to buy smart phones. In 2017 Reliance introduced the 4G enabled Jio feature phone. Cheaper feature phones with 4G capabilities that allow users to access the Internet have slowed down the adoption of smart phones, particularly among price sensitive consumers, who dominate rural and semi urban markets. While smart phone and feature phone sales in Q3 2018 registered equal number of shipments, in a comparison of growth rates, sale of both phablets and regular smart phones have clearly outcompeted feature phones. Phablets entered the market in 2012 and have grown at a compounded annual growth rate (CAGR) of 137.98 percent during the period 2012 to 2018; the corresponding number for regular smart phones is 18.91 percent during the period 2007 to 2018, while that of feature phones stood at a meager 0.74 percent. The difference is higher if we take growth in sales by value. As the base effect diminishes, growth rates for sale of phablets and regular smart phones are also likely to moderate.
Citation
Kathuria, Rajat; Kedia, Mansi; Bagchi, Kaushambi. 2019. Competition Issues in India's Mobile Handset Industry. © Indian Council for Research on International Economic Relations. http://hdl.handle.net/11540/11318.Keywords
Commerce and Industry
Intra-Industry Trade
Large Scale Industry
Labor
Technical Evaluation
Results-Based Monitoring And Evaluation
Performance Evaluation
Job creation
Occupation
Computer Industry
Innovation
Industrialization
Industrial Economics
Industrial Development
Industrial Policy
Technology assessment
Technological institutes
Employment
Information Media
Mass Media
Export Oriented Industries
Electronics
Computers
Telecommunications Industry
Manufacturing Industries
Microprocessors
Electronic Equipment
Communication Industry
Project impact
Development projects
Program management
Performance appraisal
Project appraisal
Microelectronics industry
Electronic industries
Digital electronics
Microelectronics
Podcasts
Music videos
Internet videos
Interactive videos
Videos
Video recordings
Capital market
Developing countries
Market share
Labor
Technology transfer
Cumulative effects assessment
Job analysis
Task analysis
Cumulative effects assessment
Grievance procedures
Participatory monitoring and evaluation
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