Will Flipkart’s own smartphone capture a billion hearts?

By Nishant Arora

New Delhi, Nov 15 (IANS) In India's fertile mobile landscape, dominated by Chinese manufacturers (along with South Korean giant Samsung at the top) an urge to obtain "signature" handsets has charmed buyers from diverse fields -- from telecom honchos to cricket moguls, from Bollywood heartthrobs to now e-commerce giants.

The scope is huge -- amid razor-thin profits -- with several smartphones now being launched across the price spectrum every quarter.

The truth is that not all will have profitable quarters and most won't survive, but then, it is a lucrative business and if things are set in motion from the word go, one may enter the top 10 slots in India in about one-two years of consistent growth.

Will Flipkart be successful with its somewhat mid-segment yet affordable device named "Billion Capture+"?

"The landscape today is dominated by Chinese-owned brands and it is high time that Indian design and engineering got a fair chance in this field. The Billion Capture+ is hence designed, engineered, manufactured and tested in India," Hrishikesh Thite, Category Head, Billion at Flipkart, told IANS.

"We arrived at the specifications of the Billion Capture+ after analysing millions of customer reviews on Flipkart. This launch should fill some critical gaps between customer aspirations and what is currently on offer in the market," Thite added.

The Flipkart device comes in two variants. The Rs 10,999 model will house 3GB RAM and 32GB internal storage while the Rs 12,999 handset will come with 4GB RAM and 64GB ROM.

"We have partnered with multiple designers, developers and manufacturers across the country who have all brought in their understanding of the Indian customer and their expertise -- in design or in engineering," Thite explained.

The device is being manufactured in Noida. Bengaluru-based Artificial Intelligence (AI)-startup Smartron has provided software engineering and design for the phone. According to Flipkart, the unlimited Cloud storage is provided through Smartron's India-based servers.

"More and more smartphone buyers are already buying their phones online given the large selection at their disposal. We plan to offer the phone exclusively on Flipkart," Thite noted.

Analysts, however, are divided on the future of the device.

"It will certainly be very interesting to see how this move by Flipkart pans out. Flipkart, of course, has advantages of long experience and data about consumer behaviour of online buyers," Navkendar Singh, Senior Research Manager at IDC India, told IANS.

Moreover, Singh added, Flipkart is getting into the $100-$200 (Rs 6,500-Rs 13,000) smartphone segment which, despite being hyper-competitive, constitutes almost half of the Indian market.

The Flipkart move should be seen from two viewpoints.

"Reducing dependency on partners (read smartphone brands) for getting more control over design and supply side of the device and for improved margins and earnings from smartphone sales," Singh said.

According to Tarun Pathak, Associate Director, Mobile Devices and Ecosystems, Counterpoint Research, being one of the fastest-growing smartphone markets globally, India continues to be an attractive destination for mobile original equipment manufacturers (OEMs) and other ecosystem players.

"However, in order to be successful, players need to target a diverse set of user base with their value-for-money and differentiated offerings. Just launching a device might not shake things at the ground level," Pathak told IANS, adding that Flipkart needs to do more than just place the device in the online channel.

The competitors in the mid-segment have grown over a period of years and now have deep expertise in hardware sourcing. More than that, they are better placed at spotting trends and are able to quickly align their portfolio accordingly.

"Flipkart needs a strong overall strategy, from hardware to bundling to execute," Pathak added.

According to Faisal Kawoosa, Principal Analyst, Telecom and ESDM, CyberMedia Research (CMR), Flipkart's strength is not in products but in facilitating their sales. "I don't see the device being a major disruptor," he told IANS.

It is pertinent to note that the market dynamics have changed a lot in the last few quarters.

The fight for customers' mind-space and retail-shelf space is increasingly getting difficult and expensive; China-based vendors are able to build brands across both online and offline channels and consumers are demanding the latest design and highest specifications at an affordable price.

"These can certainly present a few challenges for Flipkart as it starts its own smartphone business," Singh noted.

Thite, however, is upbeat.

"Given the large and diverse consumer base, there is space for a multitude of offerings from both e-tailers and manufacturers. We believe that different brands should continue to innovate and bring new offerings for the customer," Thite stressed.

"At the same time, we will also continue to look for need gaps specifically in the Indian market and put out 'Made for India' offerings," the Flipkart executive told IANS.

(Nishant Arora can be contacted at nishant.a@ians.in)