Top smartphone brands relied on consumer behaviour patterns to launch feature-rich, performance-optimised phones at attractive price points
2020 was a disruptive year for brands and marketers, as it challenged them to stay nimble and deploy offbeat strategies to woo consumers. The highly dynamic smartphone market saw some major reassessments as well – in new product launches, optimising performance and building better user experiences across price points.
Lockdown effect: Restrictions and repercussions
Global Covid-triggered restrictions left several top handset makers grappling with issues ranging from manufacturing shutdowns, roadblocks in inventory management (as supply chain disruptions affected the sourcing of components), a GST hike in the first quarter of 2020, a weakened rupee against the dollar, and escalating hardware prices. Each factor had a direct impact on the product’s pricing.
With the mobile market primed to welcome next-generation technologies, such as 5G and foldable displays, consumers are quickly transitioning from purchasing feature phones to smartphones. Also, consumer behaviour trends metamorphosed during the pandemic, with accelerated digital adoption, greater content consumption, online gaming, focus on e-learning, immersive shopping experiences, tele-consultations, with an increasing focus on secure digital transactions.
This evolving consumer behaviour reflected in the smartphone manufacturer’s approach to new launches and price point definitions.
Product: Decoding smartphone launch
Most brands in the Indian market launch their products in two phases – in March, when salary increments happen, and during the festive Diwali season. However, Covid lockdowns forced smartphone manufacturers to move 2020’s first launch season to the June-August quarter. A big reason for this shift was the lockdown in China that began in January and severely impacted production timelines.
With 2021 getting off to a better start, this launch cycle moved back to its original time frame.
Different smartphone brands reacted differently to the pandemic’s market impact. Apple, for instance, launched five phones in 2020 – breaking all its previous launch records. Vivo, on the other hand, launched 28% fewer phone models than it did in 2019. Realme doubled the number of new phone launches in 2020.
Smartphone brands launched a total of 91 models in 2019. Despite the pandemic, this number rose to 96 in 2020. The graph is on the ascent in 2021 as well – 39 phone models were launched in the first 3.5 months, making it the sharpest launch rate in the last three years.
Price: Change in strategy
India is a cost-conscious market and phones that are in mid-range category are still preferred than the high-end ones. With lockdowns and restrictions, there was initially a decline in the demand for smartphones however, the market witnessed an increase in the second half attributed to device dependency because of stay at home compulsions. This year, brands are banking on consumers spending on upgrading their phones, as global economies reopen and in-store shopping returns mainstream.
Several smartphone manufacturers are preparing to launch flagship phones, targeting higher price points. To offer a perspective:
- 2020: INR 5,000-10,000 and10,000-15,000 price bands had the highest share of launches, at 48% (24% each).
- 2021: INR 5,000-10,000 and 15,000-20,000 price bands witnessed the highest number of launches, at 46% (23% each)
The launch numbers for 2021 further reinforce this trend. The first 3.5 months of this year saw 6 model launches in the INR 30,000-50,000 price range. There were 7 models launched in the whole of 2020.
- In H1 2021, the INR 30,000-50,000 price brand witnessed the highest share (22.2%) of phones launched, followed by the INR 20,000-30,000 band with a 20.8% share.
- The INR 5,000-10,000 price band had the lowest share (8.3%) and INR 10,000-15,000 band had an 18.1% share.
- Price bands 15,000-20,000 and 50,000-plus had a similar number of phones launched (15.3% share each), with Samsung launching maximum premium phones – in the INR 50,000-plus band (6 out of 11).
- Pent-up demand from 2020 was clearly seen in Q1 of 2021 as around 43 models were launched during the time. Q2 clearly saw a dip due to unprecedented covid surge in India and total number of phones launched were 26.
- While Q1 witnessed maximum launches within the INR 30,000-50,000 price band (23.2% share), Q2 was a different story. The INR 10,000-15,000 and INR 20,000-30,000 price bands saw maximum smartphones launches, with 27% share each.
- The premium segment witnessed the biggest dip in Q2 with just 2 releases from 9 in Q1, 2021.
Place: Embracing ‘phygital’
With many top brands aggressively expanding their physical presence pre-pandemic, the next logical step was to assess using digital to promote in-store sales. In this context, hybrid channel models have emerged as a key gamechanger. Most top brands are taking a physical cum digital approach to assist offline purchase via online channels and vice versa. For instance, Samsung partnered with digital payments platform Benow to facilitate e-purchase of Galaxy smartphones from neighbourhood stores.
While offline stores enable touch-and-feel, going online has enabled brands to showcase launches creatively, promote innovative offers and draw customers by offering a 360-degree product experience.
Promotion: Thinking out-of-box
As countries went into mobility-restricting lockdowns, phone manufacturers began exploring online marketing and attractive promotions to drive sales in a tough year. Brands such as Samsung, Vivo, and OPPO increased their online presence while offering attractive promotions. Some brands launched innovative promotions and loyalty programs such as the ‘Smart Upgrade’ to retain and grow their user base.
Despite the pandemic, the feature phone and smartphone market has evolved, with better UX and feature-rich handsets offering consumers more bang for their buck with every product launch. This market growth was enabled in a big way by intelligent tools like PredictiVu, that enable comprehensive data collection, offer deeper business insights, and empower marketing honchos to take key business decisions, plan their campaigns better, and pivot in time by anticipating consumer behaviour patterns.
Manas Gupta is Entrepreneur In Residence at PredictiVu Pvt Ltd.
A versatile sales leader with an entrepreneurial outlook towards understanding business objectives, developing strategies and problem-solving skills.
Having a proven track record in helping offline and online businesses grow, scale and venture into new business verticals and sales channels.