There is a new wave of companies which focus on bringing to the market low-priced devices that flaunt rich features. Innovations these companies use are targeted towards developing the market for the middle-class population. The result is, of course, a boom in the sale of these devices. The Indian consumer market, dominated by a strong sense of value-for-money, has naturally bred many such players. At present, around 25 companies sell their wares within Indian shores. A large chunk of these brands is Indian by origin and a few key players such as Micromax and Spice have gained significant market shares in the past few years. With the recent launch of its tablet, the Smart Tab, Karbonn Mobiles, like its competitor Micromax, has completed its portfolio of low-price devices: low-price handsets, smart phones and tablets, rapidly becoming a company to look out for. The rest of this article focuses on the developments in the budget market, with an emphasis on Karbonn Mobiles, which is one of the fastest rising brands in the field.
Karbonn Mobiles : Low price, controversy and fancy features
Mobile phones have become cheaper, mainly driven by falling hardware prices. Most of the features of modern phones depend essentially on the hardware capabilities, which are typically semiconductor-based. Like any other commodity, semiconductor technology also comes in many standards. Innovations, therefore, enable the same hardware capabilities at a cheaper price. There are some trade-offs, of course, but India’s price-sensitive population welcomes brands like Karbonn that are prepared to compromise a little on quality in return for a cut down in price.
There has been some scrutiny of the low-price mobile industry as a whole, regarding the standards which they trade off. For example, low-price mobiles, particularly those from Karbonn, were criticized for using strong permanent magnets in speakers. This enabled them to play music very loudly, and with appreciable fidelity, but the trade off involved exposure of the mobile user to a stronger magnetic field while talking, or even carrying the phone.
Nevertheless, the companies under spotlight claimed that they followed the safety guidelines, without the usual ‘frills’. Such controversies didn’t sustain long, partly because the consumer is more interested in the features and gimmicks which the low-price markets have rather than the deeper technical issues; and partly because the market has become hugely competitive in terms of price-to-feature. A look at the price lists of companies like Karbonn, for example, shows just how intent they are at producing low priced phones with power-packed features.
Using Open Source and Freeware UIs
Android solved the major problem of incorporating a standard look and feel, and a universal platform for developing apps. Karbonn is a significant example of a company that takes advantage of the current Android boom. Taking care of the hardware requirements by contracting international semiconductor companies capable of producing low-cost semiconductors, and rolling Android smart phones in the range of Rs. 8k-9k (with the lowest one at about Rs. 6k), Karbonn has begun its stride up the low-price consumer market.
Launch of a low-price tablet
The tablet market is another booming section of the mobile industry. While high-priced iPads and Samsung Galaxy Tabs attract many buyers, the average middle-class Indian consumer has always been waiting for a low-priced version of the tablet. The Karbonn Smart Tab 1 is one of the solutions that have recently hit the market. Although it does not possess the wealth of features that an iPad boasts of, nor does it offer the same sleek multimedia experience as the Kindle Fire, those interested in a smooth tablet experience with adequate (albeit limited) functionalities, all at an eminently affordable price, will surely find the Smart Tab 1, priced at about Rs. 7k, a viable purchase.
Effect on the market
Karbonn Mobile follows a consistent marketing model, targeting the budget consumers. Since that forms the majority – the middle class of the population – it comes out very successful. However, Karbonn is faced by direct competition in the low-price tabs and handset market. Take for example, the Karbonn Smart Tab. Just after its announcement, Micromax launched Micromax Funbook, which is in all respects a direct rival of the Smart Tab. HCL ME Tab would come under the same category. Other companies like Lava, Spice and Maxx Mobile compete on the handset front. The result of such bustling competition is an obvious decrease in the prices.
The effect it produces in the overall market is pretty much the same which low-cost airline carriers produced in the Airline market. As low cost brands like Karbonn have begun earning greater profits, companies catering to the higher price categories, like Samsung, have entered the budget market with gusto, producing handsets at comparable rates to that of Karbonn and similar companies. They have the advantage of more dependable technology, but the accompanying disadvantage of delayed entry. However, it is clear that Karbonn and other budget-oriented companies have to pull up their socks in terms of better technology and design if they wish to sustain their leadership.
The low-price market is teeming with brands and models that offer consumers a rich variety of features at increasingly lower prices. With the launch of Smart Tab, Karbonn has pushed down the price barrier a little more. With developing technology and innovations, it might well push-in many more features with the same price tag. There are some fundamental technological problems that plague the entire low-price mobile device market, to which Karbonn hasn’t been an exception. The company is now not only facing competition in its price-range from rivals like Micromax and Spice, but from bigger names like Samsung as well. With growing consumer awareness and higher expectations, low price alone won’t long be a winning factor. It seems inevitable that Karbonn will have to come up with a major technological breakthrough for long-term success.