Our previous post in the series looked at some of the locations considered for new mobile device production facilities. Today’s post looks at the domestic sales situation for an early foreign manufacturer, Xiaomi, and its competition against Samsung (Find the first piece in the series here)
Xiaomi, the Chinese manufacturer, previously held the largest market share for units of smartphones sold in India. Recent Governmental actions over the last year hobbled Xiaomi’s market participation. These actions included freezing USD$725M as part of a Government investigation into Xiaomi’s India operations. (Xiaomi claims that 84% of the frozen amount is royalties due to Qualcomm.) Xiaomi’s unit market share likely dropped by more than 30% over the last year. The Indian consumer market, even at the most basic level, has clearly shifted from ‘feature phones’ and ‘budget units’ to a more capable device profile.
Competitive actions by Samsung with a “Phone on Loan?” financing program favorable to even the most budget-challenged in the marketspace (with 50% of uptake from first-time loan seekers) created a USD$1B value for sales. Samsung enforces its financial securing of the smartphone with an app that prevents outgoing calls if payments aren’t made. These competitive actions now place Samsung’s new acquisition market share above that of Xiaomi.
Xiaomi has seen almost no penetration of global markets outside of India, where its sales of budget and low-end phones have been very successful at building a brand and reputation. Xiaomi has used an Android OS stack instead of the Chinese MIUI (used as Google Apps are banned in China). With Samsung and Vivo/Oppo (and others), the combined market share of Android OS devices is overwhelming in India.
The actions of the Indian Government are creating an opening for competitors to bring additional smartphones/smart devices to the Indian market (preferably “Make in India”). Apple is a likely beneficiary of this opening, although other competitors like Lenovo/Motorola and Vivo/Oppo/Realme are also likely to benefit.
You can find other posts on the unique challenges and opportunities for Dynamic India at www.ekalore.com/india-business
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