Mobile Handset Switching Behavior of

Youth in India

Literature Review

Rohit Adukia 101243

Sanket Agrawal 101246
Vaibhav Pansuria 101262
A short history of the mobile handset industry

During the late 1980s and into the 1990s large firms such as Motorola, Ericsson, Nokia and
Siemens pushed the frontiers of mobile handset performance, and the industry was considered to
be a classic case for a vertically integrated industry. These vertical integrators not only controlled
the design, production and marketing of mobile phones, but also the mobile communications
infrastructure business.

Evolving their products from a suitcase-sized device with limited appeal beyond a very narrow
niche of business and professional users, these vertically integrated firms invested huge sums in
research and development to improve the performance and reduce the size of mobile phones. As
was the case with the earliest PCs, software components, hardware components and operating
systems were produced in-house, and assembled together in interdependent product
architectures. The resources required to enter the fledgling mobile phone industry were beyond
the means of most small and medium sized players.

But the world has changed. As was the case in the PC industry in the 1980s and 1990s, the
mobile phone handset industry is today ‘unbundling’ with increasingly specialized firms entering
the market with components and software that are assembled by branded manufacturers and
ODMs into finished devices. Now, as then, there seem to be several motivating factors at the
heart of this process: evolving technological standardization, gains from specialization driven by
differences in the evolving knowledge bases across the industry, and gains from trade emerging
from the emerging differences between specific firms. But powerful buyers – the mobile network
operators – are also exerting an important influence on the break-up of the mobile handset value-
chain by demanding manufacturers to integrate certain standards-based technologies, software
operating systems and/or applications.
The market research report “Mobile Handset Industry Asia (2004-2009)” by RNCOS, gives and
in-depth analysis of the present and the future of, the Asian mobile handset industry. The market
research report looks into the intricate details as well as provides an overview of the consumer
behavior and the gaining popularity of the mobile handsets in Asia-Pacific.

With the periodic introduction of new features and multimedia tools in the mobile handsets due
to technological advances, more and more people in the Asian continent fancy buying them. In
fact, the sales figures give a very encouraging picture of the worldwide mobile handset buying.
The figure of 482.5 million mobile handset sales in 2003 has gone up to 561 million in 2004.

There are many diversities and complexities in the Asian mobile handset market that are covered
in the market research report. The reasons for complexities are the types of customers,
government regulations, regional/geographical wireless infrastructure, and the purchasing power.
Basically, the Asian market looks at the mobile handsets as status symbols. The market is seen
best for the low-end phones, but there is a huge rise in the demand for flashier and costlier
phones.

India, China, Korea, and Malaysia are fast evolving as the biggest markets for mobile handsets.
The market research report by RNCOS covers the regional, political, geographical, financial, and
economical reasons that drive the Asian mobile handset market. It also includes the names of the
market leaders and their market share along with the names of the emerging vendors.

Report highlights

1. Overview of the world mobile handset industry.

2. In-depth analysis of the Asian mobile handset industry.
3. The present market position.
4. The future projections till the year 2009.
5. Geographical and regional segmentation of the industry and the consumers.
6. Different vendors and their technologies.
7. 3G Networks (W-CDMA, CDMA 1xEV-DO/DV, and TD-SCDMA)
8. Sales and profitability of the industry.
9. Challenges faced by the industry that propels higher competition among the vendors and
retail sectors.
10. New market vendors and the big shots of the industry along with their business strategies.
Report features

The market research report "Mobile Handset Industry Asia (2004-2009)" by RNCOS, gives an
insight into the present trends and the future projections of the Mobile Handset Market in Asia
till the year 2009. There are different aspects that the market research report discusses in detail.
Chapter 2 of the report analyses the handset market (regional segmentation, production and
distribution of the mobile handsets in the Asian market). The different vendor strategies and the
challenges faced by them are also discussed. Chapter 3 provides introduction of mobile industry
in Asia-Pacific. Chapters 4 discuss handset market trends & outlook whereas chapter 5 provides
mobile handset market analysis by region. Drivers of the Asia Mobile Handset Market are
discussed in chapter 6. Chapters 7 & 8 provide sales and growth ratio analysis alongwith handset
vendor profiles and strategies. Finally, strategic outlook and challenges are mentioned in the last
chapter of the market research report.

Top Handset Players Continue to Account for Lively Activity 

With handset shipments in the fourth quarter of 2009 amounting to approximately 257.6 million
units, the Top 5 players accounted for a whopping 77 percent share of the total handset market.

Nokia Corp. remained the leader of the handset market, shipping 126.9 million handsets during
the period, giving it a 37.9 percent share of market. Runner-up Samsung Electronics Co. Ltd.,
which has introduced its own smart-phone operating system, held the No. 2 spot with 20.6
percent share.

The remainder of the Top 5 are rounded out by LG Electronics, in third place with 10.1 percent
share; Sony Ericsson in fourth, with 4.4 percent share; and Chinese giant ZTE, whose impressive
77 percent growth from the earlier quarter vaulted it into fifth place, with a 4.0 percent share.

A second Chinese handset manufacturer, Huawei Technologies Co. Ltd., landed in seventh place
after also finishing an outstanding quarter with 82.4 percent growth. Together, the two Chinese
companies indicate the strong momentum occurring in the emerging market as well as an
increasing presence in Europe on their part with key operators.

Mobile handset industry growth was flat in 2009 at nearly 1.14 billion devices in sales but the
silver lining was the smartphone category which grew to nearly 174 million devices from a base
of 139 devices contributing to approximately 15% of the total handset sales

 Smartphones category will continue to grow with a year on year compounded growth @24%
with 30% YOY growth as of last year

 Smartphone Operating system will be the differentiating factor coupled with services based
business model for the devices vendors. Android, Windows Mobile 7 will fight with MacOSX
and Symbian to offer a compelling User Experience. Linux based platforms will dominate this
year.

 Watch out for incumbents like Nokia, Samsung, LG facing a fierce competition from
smartphone entrants Android based devices (HTC), PC vendors (HP,Dell) and infrastructure
providers(Huawei, ZTE) coming up with their own device portfolio

According to the article “Local Brands and Samsung grow at Nokia’s expense in India” the
market share of mobile handsets in India is,

Indian brands (Micromax, Spice, Karbonn, Lava, Lemon, Max) gained a cumulative 10
percentage points of market share in the very competitive Indian market.

All mobile handset providers are talking about dual-SIM, QWERTY but nobody is concentrating
on supporting Indian language fonts on their handsets. I am not talking about language
keyboards, for now we will have language reading community on mobiles, so it would be good if
they first support language fonts on their handsets.
References:

 Market research report "Mobile Handset Industry Asia (2004-2009)"

http://www.rncos.com/Report/COM14.htm

 iSuppli’s mobile market research

http://www.isuppli.com/Mobile-and-Wireless-Communications/Pages/Products.aspx

 ARC (2004), ‘Worldwide Market Analysis & Strategic Outlook 2004 – 2009’, Future
Mobile Handsets, 6th Edition