Samsung Mobiles line-up of smartphones and tablets has helped the handset maker rally a significant share in a market

that is largely dominated by Nokia. Samsung sold 12.6 million smartphones in the quarter ended March 2011, boosting its global smartphone market share by 7.4 percentage points from the previous year to 12.2 per cent. It now ranks fourth after Nokia, Apple and Research in Motion (RIM). Samsung is only 1.2 percentage points behind RIM and is expected to grab the number three spot in 2011 if it maintains its current growth rate. Advance orders for Samsungs Galaxy S2, which was released in April 2011, surpassed 3 million units within a week of the launch, posing a threat even to Apple. At this rate, its sales are expected to top 14 million units in the current quarter. Focus on India India is the fastest growing telecom market in the world and presents an attractive opportunity for handset makers like Samsung. As per a GFK Nielson report, the Indian mobile handset market was pegged at around 155 million units in 2010. With the country adding 20 million mobile customers every month, the mobile device market is expected to grow at over 16 per cent year-on-year. Driven by the launch of 3G services, the smartphone market alone is likely to grow at over 50 per cent per annum for the next two years. The Korean handset makers smartphone strategy has clicked well in the Indian handset space. The company opened its smartphone account in India in June 2010 with the launch of its Galaxy S and Wave models, and now has over 12 smartphones on almost all the popular platforms including Android, Windows and its internally developed software, Bada. Samsung had a share of 10-15 per cent in the smartphone market as of January 2011, and is aiming to notch it up to 40 per cent by end-2011. According to company officials, in 2011, Samsungs mobile handset division will be driven by two key factors touchscreens and smartphones. In this segment, the company has also launched its tablet PCs. Thanks to the hugely positive response that the Tab has received across India, Samsung is targeting a 50 per cent share of the Indian tablet market in 2011. While tablet PCs are still a niche segment in the country, if Samsung positions its products well, it could well succeed in meeting its targets. A key area of focus for Samsung will be the enterprise segment, which is showing an increased demand for such devices. In all, Samsung has over 50 handset models in India, ranging from entry-level to mid-range and high-end smartphones. According to a GFK Nielsen report, the companys overall market share stands at around 23 per cent of the Indian mobile market in value terms. Manufacturing and R&D Samsung has two manufacturing units in India, in Chennai and Noida, and produces around a million units of mobiles per month. While the company currently manufactures only its entry-level Guru series at these units, it plans to start producing smartphones as well in India going forward. The company has also increased its focus on applications to provide users with a wide range of applications across various platforms like Android, Windows and Samsungs own Bada. The company is reportedly working with around 800 application developers in the country to develop customised applications for the Indian consumer.

However, offering innovative products in the global and Indian markets warrants a strong focus on R&D and Samsung is not cutting corners. Over 9 per cent of the companys global expenditure is spent on R&D every year. The company has a team of 3,000-odd engineers across its two R&D facilities in India, customising its smartphones and tablet PCs, finetuning its mobile operating system, creating applications, etc. Samsung has two software development centres in the country the Samsung India Software Centre (SISC) in Noida, Uttar Pradesh, and Samsung Electronics India Software Operations (SISO) in Bangalore. The latter is already working on more advanced technologies like 4G. In fact, the mobile communication team at SISO is at advanced stages of developing devices on technology platforms including LTE, HTML5 and Android OS for tablets and dolphin browsers in smartphones. The Bangalore R&D centre has collaborated on global projects and developed a dongle for 4G mobiles that has been launched in Norway, Sweden and Finland. The road ahead Samsung sees the increasing demand for 3G-enabled handsets as an opportunity to grow in 2011. According to data from Gartner, the sales of 3G-enabled handsets comprised 16.7 per cent of the industrys total sales in 2010, up from 9.2 per cent in 2009. By 2011-13, 3G device sales are expected to account for 69 per cent of total sales. With an array of 3G devices launched for the Indian consumers, Samsung has created a market demand for 3G smartphones and is also offering users access to content and downloadable application software. At present, Samsung has 17 handsets with 3G applications in India, with prices ranging from Rs 8,990 to Rs 29,290. However, the company needs to watch out for competition. LG, for instance, is lining up several new smartphones. Its new mid-priced Optimum One handset has done well and LG has announced its target to double its global smartphone shipments to 15 million units in 2011.

Samsung has restructured its electronics and appliances business to create two sales verticals in a bid to replicate its mobile phone success in the Indian consumer durables market where it trails LG Electronics. Samsung Electronics India now has two sales verticals-one selling products to distributors, stand-alone multi-brand outlets and Samsung brand stores, and other focusing only on national and regional retail chains. The restructuring is the brainchild of BD Park, who took charge as MD of Samsung India in January, after successfully building the South Korean firm's mobile phone business as the second largest brand in the country and overtaking market leader Nokia in the smartphone market. HK Seo, head of Samsung's consumer electronics business, said, "This will be a win-win situation for both the company and channel partners by re-organizing our business around the sales channel with dedicated team for channel management and products."

The move is a first of its kind in the Rs 37,000-crore Indian durable industry, where companies organise their business on product segments. Samsung Electronics, for example, earlier had two verticals-one for audio-visual products like television and music players and the other for home appliances such as refrigerators, washing machines and air-conditioner. Mahesh Krishnan, who was the head of home appliances business, has been re-designated as the head of distributor channel while the erstwhile head of audio-visual business, Raj Kumar Rishi, now heads the retail chain channel. They will report to Seo and Park. Each of these two verticals will have separate heads for audio-visual products, home appliances and air-conditioners and separate teams for product management, supply channel management and sales planning. The battle lines are being redrawn in the 213-million-unit mobile device market in India. If handset king Nokia is looking to Connect the Next Billion with differentiated products and unmatched experience, close No 2 Samsung is banking on range and smart apps to catapult it to the top of the heap. As the two intensify their efforts to strengthen their respective positions in India, there is frenetic behind-the-scenes activity to put together an eco-system that will give them an edge over the others in the fray. While the Indian mobile market is driven by the lowest call rates in the world and a plethora of low-cost devices that account for 75 per cent of the overall sales, the segment where the game plans of the Top 2 will play out is the aspirational smart phones where the Korean company has already cemented its position as the top dog in the fag end of 2011.

Mind you, India, accounting for approximately 12 per cent of worldwide sales, is an important market for device manufacturers, with aspirations to grow their global market share. And smart phones are crucial because India is at a juncture where this segment will see exponential growth, driven largely by the need of the consumer to access data on the mobile phone. Smart phones are witnessing an increased adoption in the India market, not only amongst business executives but also among the youth as such devices offer superior usability, entertainment and functional capabilities, says Naveen Mishra, lead analyst, CyberMedia Research Telecoms Practice. Just look at these figures for proof: In the fourth quarter of 2010 smart phones contributed 6 per cent to overall mobile industry. In the fourth quarter of 2011, the figure had touched double digits to stand at 10 per cent. From 8 million last year, the number of units is expected to touch 18-20 million before we close the year. Given this, the urgency with which both Samsung and Nokia are pushing models in the segment is understandable. Both the leader in the smart phone category, Samsung, and overall market leader, Nokia, have set their eyes on being scale players. To this end, Nokia has moved to Windows as the primary platform for its smart phones, while continuing to invest in the Symbian operating system (OS). Samsungs master plan includes following a multi-platform strategy in smart phones as the company launches phones across Android, Windows phone and its own Bada

operating system. It says it is in a market creation mode as it beefs up in-store and out-ofstore demonstrations (customer interaction) across the country. The question however is, can late comer Samsung topple market leader Nokia to gain an overall lead in the mobile handset market? Or shall we see the world-leading mobile phone maker which has the first mover advantage having set foot in the country in 1995, make a comeback in smart phones? Their new offerings might offer some clues. Product first Even though the Lumia is few months old (Nokia Lumia 800 and Nokia Lumia 710, based on the new Microsoft Windows 7.5 Mango OS, were launched in November 2011), Nokia are optimistic about the momentum the new range will generate. The company says that one indication of the growing interest of the people in the brand is that two out of every three consumers walking into a Nokia store want to know about Lumia. Viral Oza, director, marketing, Nokia India, says, A smart phone is not what an industry might define a device by; it is more about the kind of experience the consumers get which actually defines whether a phone is smart or not. Nokia, in a way, has always stayed true to the promise of taking the benefits of technology to the masses. And thats what we will continue to do with the Lumia and the Asha series of devices. As far as smart phones are concerned, Samsung will not choose for the customer; instead it will offer the customers a choice, says Ranjit Yadav, country head, mobile & IT business at Samsung India. So range will be key in effect it has phones starting at Rs 7,000 and going all the way up to Rs 35,000 for its products across the three platforms. Speaking about the brands journey from being a late entrant in India to a leader in smart phones, Yadav says, End of 2010-early 2011 was the inflection point for us, when a lot of things fell in place. We said to ourselves that we have to offer the right solutions to our consumers and we started working at it in a comprehensive way. Remember we are not here for a niche play or for a small set of the consumers. We want to offer certain features and applications for everybody who has a Samsung phone and then offer them a choice to move up to a smartphone. So it is solutions which is the key be it in smart phones or feature phones. But since smart phones are still new as a concept a big task Samsung has taken upon itself is consumer education. Even though most customers conceptually know what an Android phone is, often they dont know how to use the same, whats the value proposition behind it, how do actually make it do tasks, availing enough applications, accessing content and so on, so that people can really use it. It should not be a just a feature phone-plus, instead it should be really offer a smart phone experience, adds Yadav. To this end, Samsung has set up a retail footprint across the country that not only allows it to address its customers but also helps it learn about consumer experience through a range of activities demonstrations and customer interactions, in-store and out-of-store. The idea being, once customers are offered the full knowledge of and shown the advantaged of using a Samsung product, it will create a viral of its own, points out Yadav. On his part, Nokias Oza says the pillars of its India strategy has been reach and after sales service. Apart from reach, access to post-sales service has been the key to Nokia for many years. The retail end was refurbished with the launch of Nokia Lumia series we undertook

a huge internal training exercise covering 12,500 people because it is on a new platform and consumers needed to be explained and offered a certain experience. The idea was creating advocacy with everybody associated with Nokia. A lot of live devices were placed in our outlets and a unique shopping ambience was created for the consumers, he says. Both Samsung and Nokia strongly believe that while they are in a market creation mode, the onus analysts lay on price is often exaggerated. The customer must get a superior experience and should be offered an eco-system that will help them make full use of the device in their hand, says Samsungs Yadav. With time the price will come down in any case. If customers are dissatisfied with the outcome, irrespective of the price, all efforts will fail. This is a choice manufacturers have to make offer value pricing or cheap products. The two have also eying the dual-SIM segment with keen interest. Dual-SIM and multi-SIM handsets were 55.8 per cent of total mobile handset shipments in the country in the JulyAugust-September 2011 quarter, according to a report from CyberMedia Research. Nokia, a late entrant to the multi-SIM device category, made up by having as many as five models on offer by September 2011, the report said. Last month, Samsung launched three dual-SIM smart phones in India the Galaxy Ace Duos (SCH-i589), the Galaxy Y Pro Duos (GT B5512) and the Galaxy Y Duos (GT-S6102). The company also strengthened its feature phone dual SIM portfolio with the launch of the Samsung Champ Deluxe Duos (C3312) and the Star 3 Duos (GT-S5222). Apps effect What will be key in determining the way forward is applications or apps, as they are referred to in the industry. Application development received a boost post 2008 when developers took control and started delivering high quality content and directly deal with consumers without going through telecom operators. The 18-to-25 generation quickly took to this idea of downloading apps. The key to application development is catering to consumer demand. What is important for smart phone players today is creating content understanding the demographics and overall psychological pattern of the people, shares Virat Khutal, CEO, Twist Mobile, an Indore-based company that has seen more than 25 million apps downloads on the Nokia Store globally. Both Samsung and Nokia have really kept their noses to the grindstone to offer applications and customisation, knowing the strategic difference it can make to their fortunes. In the past few years, cricket, gaming, astrology and Bollywood movie-clip and music downloads have ruled the roost in terms of availability of online and mobile content in India. Going forward, it is important for the three-part ecosystem of device vendors, content companies and telecom service providers to invest in creating attractive and relevant content packages for the growing segment of 3G device and smart phone users. The industry also needs to focus on improving the overall user experience by making lighter, faster applications. These measures are expected help grow data consumption in the country and lead to improvement in telco ARPUs (average revenue per user), sums up Mishra of CyberMedia Research.