(Times of India Via Acquire Media NewsEdge) BANGALORE: From 5.5 million units in the first six months of 2012, smartphone sales are estimated by Cybermedia Research to almost quadruple by the end of this year to 20 million.
"It remains to be seen how Lenovo can differentiate itself from the hundreds of existing Android phones," said Faizal Kawoosa, an analyst at Cybermedia Research.
Last week, the $30 billion Chinese computer-maker launched its smartphones in India, priced from Rs 6,000 all the way up to Rs 28,500. A track record of success gives Lenovo confidence that it is on to a good thing despite joining late -- it became the biggest PC seller in India in a little over three years and in China it has overtaken local company HTC in smartphone sales within three months of launch.
Lenovo credits its success in the PC market to its "Protect and Attack" strategy, which seems to be borrowed from the Art of War, an ancient Chinese military treatise believed which lays emphasis on the timing and energy of the attack, as well as the importance of positioning on an advantageous terrain.
After its initial success in China, Lenovo opened its India beachfront in smartphones just ahead of Diwali, a festive season traditionally known for good gadget sales. "We will follow an attack strategy to start with in South and West of India.
We are consciously launching the devices only in a few states to start with. We want to concentrate on our salesforce and attack the market with a vigour than spread ourselves too thin," says Ashok Nair, who heads Lenovo's sales unit in south India.
For now, Lenovo is focussing on Tamil Nadu, Andhra Pradesh, Karnataka, Kerala and Gujarat, states which Lenovo says account for 35 per cent of India's smartphones market. The big challenge is expected to be the distribution network, and it is for this reason that competitors think Lenovo is not going to be a threat.
SN Rai, co-founder and director, Lava Mobile, said that the IT channel through which Lenovo sells personal computers and laptops is not big enough for smartphones. "I'm sure they'll be able to create a lot of noise in India. However, success depends on getting the distribution right," he said. Vikas Jain, the co-founder of Micromax, another local brand which has been slowing making inroads into smartphones, tablets and flat panel TVs, believes that most of the action is in the price range of Rs 5,000. The trick, he said, is to help feature phone users upgrade to smartphones.
And the fact that Lenovo upstaged HTC in China is not a pointer to their potential for success in India, he observed. "Like in the United States, operators subsidising phones played a role in Lenovo's success in the Chinese smartphone market. In India, it is a different ball game." Jayanth Kolla, partner at telecom consulting firm Convergence Catalyst said it is still an open market as brand loyalty is not yet the norm here, presenting opportunities for new players.
He cited the examples of Micromax and another local vendor Karbonn, which increased their market shares from around 1 per cent to nearly 10 per cent over the last three quarters . "While this shows that there are plenty of opportunities to grow, it also means that this market can sway in any direction," Kolla said. With PC-sales already beginning to shrink in developed markets, where consumers have switched allegiance to tablets, success in India is a question of long-term survival for Lenovo.
"Lenovo is a familiar name. The challenge, however, will be in building a stronger distributor network. It needs wider reach and many more touch points," said Anshul Gupta, principal research analyst at Gartner. A late entrant into the smartphone business, Lenovo is pursuing an aggressive strategy to gain marketshare in a country which has vexed the likes of Nokia and Research In Motion (RIM), the maker of Blackberry.
But industry analysts and rivals caution that the Chinese brand -- Lenovo that sells more PCs than anybody else in India -- will start at the bottom and faces a tough climb upwards.
Besides Samsung, which leads India's smartphone market with a near 40 per cent share of the market, Lenovo faces competition from a posse of Indian brands, including Micromax, Lava and Karbon. After tasting success in feature phone market, especially in smaller Indian towns and cities, these homegrown brands are making steady inroads into the smartphone market.
Only a minuscule portion of India's 900 million mobile subscribers use smartphones, but that number is growing exponentially.