India mobile handset revenues drop 5% in FY2011-12; Nokia retains No.1 spot despite negative growth in revenues

9 Jul, 2012

Indian mobile handset market revenues dropped 5 per cent from $5.9 billion (Rs 33,031 crore) to $5.586 billion (Rs 31,215 crore) in fiscal year (FY) 2011-12. The prime reason behind the drop was the negative growth in the feature phones sales as well as the lower average selling values (ASVs), according to a survey by Voice&Data, CyberMedia group's journal for the telecom industry.

Also, the fact that six (or 60 per cent) out of the top 10 handset manufacturers (including no.1, 3 and 4) witnessed a drop in their revenues did not help matters.

Nokia still the market leader

Nokia retained its no. 1 spot in the Indian mobile handset market with a market share of 38.2 per cent, despite an 8 per cent drop from $2.314 billion (Rs 12,929 crore) revenue posted in FY 2010-11 to $2.134 billion (Rs 11,925 crore) posted this year.

Although the company did well in the made dual SIM phones category, it lost market share in the smartphones and multi-media segment to other big players like Samsung, HTC and Apple, among others, mainly because of its absence in the Android ecosystem.

Samsung on the other hand, grew its revenues 38 per cent to $1.412 billion (Rs 7,891 crore) from $1.023 billion (Rs 5,720 crore) in the previous year and at captured the No. 2 spot with a market share of 25.3 per cent. The company's success was mainly because of its rich product portfolio on Windows, Android as well as Bada operating systems. Its Phablet offering Galaxy Note turned out to be the golden goose considering the company sold 40,000 units of Note each month since its launch in late 2011.

Research In Motion's (RIM) revenues dropped the most but the company still managed to take the no. 4 spot in the top 10 list. Its saw a drop of 25 per cent to $261.29 million (Rs 1,460 crore) from $348.99 million (Rs 1,950 crore) last year. On the other hand, Taiwanese handset maker HTC saw the maximum growth among all the brands, registering a growth of 105 per cent. The company's revenue more than doubled to $165.19 million (Rs 923 crore) from $80.53 million (Rs 450 crore) in the previous year.

"As consumers look for applications beyond voice and SMS, the market will see fight for high end feature phones and smart phones intensify further. Consumers can also look forward to steeper price drops and more features in the same price," said Ibrahim Ahmad, group editor, Voice&Data.

Poor performance of Indian brands

Most of the Indian handset manufacturers had a disappointing year since feature phones, their main stay, saw a negative growth.

"Indian mobile phone brands that had hoped to make a mark by sourcing Chinese handsets and selling them only on the price plank were in for a big surprise. These players will have to quickly rethink their product, marketing and service strategy afresh to put their house in order," said Ahmad.

Home grown handset company Micromax was ranked no. 3 (market share of 6.3 per cent) with revenues of $354.05 million (Rs 1,978 crore), but it also recorded a 13 per cent negative growth. The only other Indian player to post revenues of over Rs 1,000 crore was Karbonn with $237.52 million  (Rs 1,327 crore) in revenues. Surprisingly, the company grew its revenues 32 per cent to emerge as the no. 5 player with a market share of 4.3 per cent.

The other key players in the Top 10 list include Spice Telecom, LG, G'Five (all of them witnessed a drop in revenues) and Huawei (recorded growth).

(Edited by Prem Udayabhanu)