High-end features at affordable rates: How players like Xiaomi, OnePlus are changing market dynamics in India

Top smartphone players such as Xiaomi, Oppo, OnePlus, Vivo and now even Samsung are providing their so-called flagship, or top-end features at the mid-segment as competition intensifies.

NEW DELHI: Gone are the days when one would have to pay way over Rs 50,000 for the best specifications and features for a smartphone. Now, customers looking for premium specs, in terms of high-speed processors, memory, camera quality and more powerful battery can get them all for mostly under Rs 35,000, with some options available for even as low as just over Rs 20,000.

Top smartphone players such as Xiaomi, Oppo, OnePlus, Vivo and now even Samsung are providing their so-called flagship, or top-end features at the mid-segment as competition intensifies. This, at a time maturing Indian consumers are willing to spend higher on smartphones, pushing up the average selling price (ASP) for handset makers, said analysts.

Also, customers are now more discerning, giving importance to features or components such as RAM and processor or System on Chip (SoC), along with the camera and display type when they upgrade their smartphones, they said. 

The change in the approach of handset makers to tap into the evolving customer mindset is quite apparent. For instance, previously Qualcomm's Snapdragon 845 was used in smartphones priced between Rs 45,000 and above, but now a brand has recently introduced that processor in its Rs 20,000-Rs 30,000 handsets. These are also backed by a 4000 MAh battery and a 6GB RAM, ones which are typically known to be available in what are known as high-end phones. Further, the camera quality in the devices across both price bands are almost the same.

No wonder, DJ Koh, Samsung’s CEO for IT & mobile communications, told ET recently that the Korean electronics major will bring premium features in the mid-priced segment to respond to competition from the likes of Xiaomi, OnePlus, Oppo and Vivo.

“Previously, people used to consider brands, but they will now focus on certain components like camera, system-on-chip (SoC), and memory before making a phone purchase,” Tarun Pathak, associate director at Counterpoint, said. Thus, “brands are looking at differentiation on the components front. This is a big win for customers”.

Pathak said the ASP for vendors is on the rise and Rs 15,000 is the new sub-Rs 10,000 price points with customers looking for upgrades.

And the focus on the components is apparent with even Qualcomm’s Snapdragon being advertised by brands in promotions like TV commercials and digital ads, he said.

The moves by major smartphone makers to make available premium features at lower rice points is poised to make the $300 (around Rs 21,000) to $500/$600 segments more vibrant and competitive in the world’s second largest smartphone market, said analysts.

They also add that the developments will in a way help the super-premium segment, led by Samsung and Apple, in that, consumers looking for the so-called “snob value” will want to own such devices.

“These [new] launches won’t kill the flagships so to speak, but have the potential to force smartphone makers to innovate better and faster in the flagship segments to maintain relevancy,” said Navkendar Singh, associate research director, client devices, IDC India.

Rushabh Doshi, research manager at industry tracker Canalys, said that as the mass market moves to devices in the range of $400 to $500, consumers looking to set themselves apart from the crowd, with a standout device, could opt for a super-premium iPhone, a Galaxy S or a Pixel.

IDC’s Singh, too, believes that customers going for high-end flagship devices care for look and feel, and build quality even if these new phones are good from a value perspective. “This will not impact flagship demand significantly, target customer for both is very different.”

With the upcoming iPhone launches, One Plus 6T and the just-launched Note 9, this ultra-premium segment is expected to maintain its momentum, more so, in the festival season in the next 3-4 months, said Singh.