Making the right calls

Time was when you’d never think of flaunting this mobile phone, at least not like fans of the iPhone did. Nor was it the trusty Nokia that many Indians readily swore by. But Samsung seems to have steadily crept up behind the giants and, in one fell swoop, grabbed the attention of believers and non-believers alike.

In a market that is highly diverse and could therefore swing any way, this Korean handset maker did its time in the trenches. After gradually garnering volumes with lower-priced devices and testing the market with a few costlier ones such as the S3 and S4, the launch of the Galaxy Note 3 pretty much paved the way for a winning ride in a country that was tuned into a Finnish phone-maker’s ringtones.

“In markets like India, price points are key. For Samsung, it is the lower-end devices or products like Galaxy Star that bring in volumes ... it manages to reach out to nearly the whole user base in India,” says Manasi Yadav, Senior Market Analyst, Phones and Phablets, International Data Corporation (IDC).

Fending off criticism of its enormous global advertising spend that failed to fetch enough sales, and comparisons with other brands that make big dents without similar investment (Apple, for example), Samsung worked relatively quietly to build itself a market. While the iPhone was busy becoming an aspirational product, and the Lumia catered purely to price-conscious buyers and touted the familiarity of its Windows platform, Samsung focused on forging a key relationship — it now has Android as its firm ally.

As Yadav elaborates, “Samsung has a strong connect with Android and, without experimenting too much, it was quick to make changes to its user interfaces to integrate well with Android. The app ecosystem is unbeatable too. What’s more, most smartphone users here are on Android (90-95 per cent).”

Partnerships have been a strong point too. “Samsung’s partner distribution and database management is like no other. They have an extremely transparent and streamlined approach… with an excellent partner reward scheme,” says Yadav.

When the Note 3 arrived in September 2013 on the back of a range of smartphones, Samsung’s buyers were already used to the idea of getting everything they wanted in a device that did not necessarily cost a lot. The requirements in India by and large include easy access to social networks, clicking good pictures on the go and game apps for commutes and waiting hours. Besides these, most smartphone users just want a good-looking device. Given the strong brand loyalties, conversion is slow.

In spite of all the activity in the smartphone segment, all brands put together have only managed a penetration of about 20 per cent in India. Analysts say we are only just getting used to the smartphone experience.

Many in Tier 2, 3 and 4 cities are happy with basic mobile phones. As for productivity, from dealing with email to planning meetings and presentations while on a flight were the preoccupations mostly of the very tech-savvy.

So could the introduction of the Galaxy Gear, Samsung’s smartwatch, along with the Galaxy Note 3 have been a good idea?

There’s a drawback to offering way too many options or models to an inexperienced market — consumers are likely to get confused. Further, to add a new device on another new device may not have been the right move just now. Reportedly, not even a fifth of Samsung Note 3 buyers are also buying the Galaxy Gear.

However, Vineet Taneja, Country Head, Mobiles & IT, Samsung India, says Gear has been “accepted very well and now we have also announced Gear compatibility with other Galaxy devices leading to an increased demand”.

If Samsung continues to be its dynamic self, it could very well carve a clear majority market for itself in India. Its perception here could very well be influenced by its performance worldwide. And although the Note 3 hasn’t flown off the shelves, by November last year, technology website Techtree had headlined it as ‘India’s most desirable premium phone’. In a survey it conducted, it was evident that Samsung’s competition in the premium phone category comes largely from Apple.

It is difficult to ignore other players, though. HTC, Sony, LG and new entrants such as Lenovo will continue to create an exciting field. While Nokia taps new markets with its Asha series, the iPhone will continue to add to its cult following here. And there are the local smartphone firms to contend with. India’s many festive periods will offer opportunities. Samsung began to capitalise on the festive weeks in the last quarter of 2013 to slash prices of the Galaxy Note 3. India, with its diversity of income groups as well as consumer preferences, remains a happy hunting ground for most smartphone brands.

Taneja says, “We realised content and services in local languages hold the key to future growth.” From early 2012, Samsung has been providing content and applications in 11 Indian languages. The prices of Samsung phones range from ₹1,100 to ₹49,900.

With global smartphone sales projected to cross one billion in 2013 and prices of many brands expected to fall, Samsung will do well to focus its strategy and streamline its messages to enable customers to make quicker and more informed choices while considering a smartphone purchase. Ranking second on the Boston Consulting Group’s 50 Most Innovative Companies for 2013, it is not a brand that will ever be perceived as stagnant by any standard.

In the end, a world once largely divided between Windows and iOS is taking notice. A Korean consumer goods brand managed to exploit a strong third alternative to tug the carpet from under the feet of more than one Goliath.