6 ms·

India Surpassed the USA to Become the 2nd Largest Smartphone Market in the World

100 points by notlukesky 7y ago

techaddict009 7y ago
Internet Era has just begun in India. More and more 1st-time internet users are joining the wave. Thanks (Or maybe no thanks because they created a monopoly in telecom sector) to Jio for making the Data rate too cheap and to manufacturers like Vivo, Xiaomi, and Oppo for making Smart Phones available at a cheap rate. (Less than 1$ for 2-3 GB.)
- iso947 7y ago
  Too cheap? Why is it a problem?
  - thrwaway69 7y ago
    For one, most major telecoms have folded beside airtel. Rest of them are shrinking or have merged. Jio is a short term gain over long term problems most likely as they have started to creep up, internet speeds are once again abysmal, censorship and surveillance (why do jio apps collect so much data and need so many permissions?) Jio is when you can cannibalize an entire industry in a few years just because you have money to give out for free until everyone switches. I think India is pretty great for this kind of plans as you can see, they are quick to switch and have no loyalty to anything. If you can kill out all the competitors before they can compete, you win. Arguably, jio has improved many things and is a net positive so far but not for long enough. I won't claim anything on the specifics of government having connections with jio.
    - Retric 7y ago
      It’s a higher risk than you might think as new competitors can enter the market after they have lost their cash reserves and gained a bad reputation. That requires spectrum which might be an issue, but they are raising prices before their competition is bankrupt.
      - thrwaway69 7y ago
        Not in the telecom industry where it's pretty hard without A LOT of money and political power even when jio started. They also had previous experience and size to pull it off. They aren't going to make it easier for new competitors now.
- deleted 7y ago
  [deleted]
- denzil_correa 7y ago
  > Jio for making the Data rate too cheap > (Less than 1$ for 2-3 GB.) Cheap is not the same as affordable. 1$ in India is equivalent to ~18 US$ [0]. [0] https://data.oecd.org/conversion/purchasing-power-parities-ppp.htm https://data.oecd.org/conversion/purchasing-power-parities-p...
  - m-p-3 7y ago
    I wish it was that affordable then. Signed: A Canadian
  - sseth 7y ago
    Actually these numbers are misleading - actual rates are much lower. For example, Jio has a Rs. 149 (2.1 USD) plan for 24 days for 1 GB per day. That works out to about 10 cents for a GB.
- deleted 7y ago
  [deleted]
- sseth 7y ago
  Well, it's not a monopoly by any stretch. Market share - Jio - 32%, Vodafone Idea - 29%, Airtel - 28%, BSNL - 10% as of Nov 2019. Yes - the incumbents (Vodafone, Airtel) have suffered a loss of market share and revenues / profits. Serves them right for keeping data rates high and not investing in modern technology when they had the money and market share to do so. I am sure customers in other markets would wish for real competition like this.
  - signal11 7y ago
    The situation is much more complex than you describe. The telecom sector has been has been hit with arbitrary regulation and tax laws that have disproportionately impacted existing players. One of the reasons Vodafone has deferred investing is because of uncertainty around the massive tax burden in a 16-year long tax dispute because of a rule the telecoms department made up referred to as “Adjusted Gross Revenue”, which all providers appealed in the courts over years (and lost). It’s a huge tax that significantly eats into providers’ ability to invest. Faced with it, most other providers have simply exited the market. To add to this, the regulator is hand-in-glove with Reliance Jio, which is the new kid on the block and very well connected politically. Some background: https://thewire.in/tech/reliance-jio-telecom-regulation-trai-anil-ambani https://thewire.in/tech/reliance-jio-telecom-regulation-trai... Unsurprisingly the only mobile service provider doing well is the one which is well connected politically. Now the government is waking up to the shit-storm its policies have created, and are considering tax deferments for the existing mobile providers. In short, mobile services’ regulation in India has been very poor. And the outcome is that from 6+ healthy telecom companies, there is now one healthy company, one scraping by, and one ready to quit. I don’t believe customers in other markets would want this outcome.
notyourwork 7y ago
Which companies stand to gain most financially from this growth in a new market?
- pimmen 7y ago
  If you have an app that solves something we take for granted in the West, and the initial cost barrier is very low, you have a great business model for the Indian market. When WhatsApp cost $1 per year it had a terrific business model for the emerging markets. Now that it’s free Facebook is complaining that they don’t make enough money.
- wtmt 7y ago
  IMO, it’s the ones that have a lean, low cost, low price, high volume model for their products or services. India is a highly cost sensitive market and there’s hardly any kind of customer stickiness that can be taken advantage of. Even mobile number portability has huge numbers reported every quarter where people switch, while retaining their phone numbers, between the four main providers (among which three are in doldrums) who have survived the brutal costs and truly ruthless competition.
techie128 7y ago
This is great news for India as more people are gaining access to the Internet. However, this is only one side of the story. The ARPU (Average Revenue Per User) in India is around 72 INR which is approximately 1 USD per month. For the US, it is approximately 50 USD per month. This figure makes a big difference as far as the revenue opportunity is concerned. This affects telecom operators a lot more than mobile phone manufacturers. India is also one of the fastest growing economies in the world. It is expected that not only more people will come online but also the per capita income will grow rapidly that will make it more lucrative in the future.
- Symbiote 7y ago
  Is that $1 or $50 only the user's cost of the service (for calls and data), or does it also include spending on apps, in-app purchases, paying a debt on the phone and so on? If it's just the service, $50 seems very high for an average. The most expensive phone service contract I can find here in Denmark is $45.
  - lotsofpulp 7y ago
    Depends what kind of service you want. Best coverage and minimum throttling is $70 to $80 per person (Verizon and ATT). Being on family plans can bring it down to $40 to $50 though. Minimum is $30+ on Sprint or T-Mobile.
    - nicoburns 7y ago
      I guess a lot of it is the difference in population density, but that does seem expensive. In the UK, you can get top-level coverage (O2's network) 80GB 4g with unlimited calls/texts for £20/month (~26USD). I currently pay £10/month for 6GB, which is a lot worse value per GB, but more than covers my needs.
      - 7ewis 7y ago
        Pretty easy to get cheaper deals too when you've been a customer for a few years. I pay £5/m for unlimited data, 600mins, unlimited texts on Three. I know I've been super lucky with that deal in particular.
ThomPete 7y ago
Its important to distinguish between internet users and internet consumers. Only India 1 (115 million) have the money to really spend, they are consumers. India 2(approx 450 mio and are those who in large parts work for india 1) have older smartphones or feature phones and only some of them have money to spent. A lot of bad vc investments didnt make that distinction and got hurt. None the less lots of opportunities there for thos who can find products or services india 2 can afford.
- killjoywashere 7y ago
  Is there a formalization of the Two Indias concept in the economic literature or market reports?
  - iso947 7y ago
    I assume “India 3” would be the other 500+ million?
    - tangoalpha 7y ago
      I was wondering the same. As the numbers didn't add upto the population.
    - ThomPete 7y ago
      Yup India 3 is the rest.
- Merrill 7y ago
  Is the market also segmented by language community?
  - thrwaway69 7y ago
    Actually it's not that bad compared to some of the other countries. While we do have too many regional languages and dialects across states, people are usually bilingual.
  - 7y ago
baybal2 7y ago
Indian cellphone market is dominated nearly completely by Chinese brands
GoodGOYIM 7y ago
poo in loo
pretty_dumm_guy 7y ago
This has been fueled by cheap internet rates promoted by Jio and followed by other players in the market. I really appreciate this development as this gave access to countless business and introduction/improvement of few others too. However, I am worried that this development has been led without proper framework to tackle issues like privacy, fake news, surveillance etc.,

100 points by notlukesky 7y ago

Internet Era has just begun in India. More and more 1st-time internet users are joining the wave. Thanks (Or maybe no thanks because they created a monopoly in telecom sector) to Jio for making the Data rate too cheap and to manufacturers like Vivo, Xiaomi, and Oppo for making Smart Phones available at a cheap rate. (Less than 1$ for 2-3 GB.)

iso947 7y ago
Too cheap? Why is it a problem?
- thrwaway69 7y ago
  For one, most major telecoms have folded beside airtel. Rest of them are shrinking or have merged. Jio is a short term gain over long term problems most likely as they have started to creep up, internet speeds are once again abysmal, censorship and surveillance (why do jio apps collect so much data and need so many permissions?) Jio is when you can cannibalize an entire industry in a few years just because you have money to give out for free until everyone switches. I think India is pretty great for this kind of plans as you can see, they are quick to switch and have no loyalty to anything. If you can kill out all the competitors before they can compete, you win. Arguably, jio has improved many things and is a net positive so far but not for long enough. I won't claim anything on the specifics of government having connections with jio.
  - Retric 7y ago
    It’s a higher risk than you might think as new competitors can enter the market after they have lost their cash reserves and gained a bad reputation. That requires spectrum which might be an issue, but they are raising prices before their competition is bankrupt.
    - thrwaway69 7y ago
      Not in the telecom industry where it's pretty hard without A LOT of money and political power even when jio started. They also had previous experience and size to pull it off. They aren't going to make it easier for new competitors now.
deleted 7y ago
[deleted]
denzil_correa 7y ago
> Jio for making the Data rate too cheap > (Less than 1$ for 2-3 GB.) Cheap is not the same as affordable. 1$ in India is equivalent to ~18 US$ [0]. [0] https://data.oecd.org/conversion/purchasing-power-parities-ppp.htm https://data.oecd.org/conversion/purchasing-power-parities-p...
- m-p-3 7y ago
  I wish it was that affordable then. Signed: A Canadian
- sseth 7y ago
  Actually these numbers are misleading - actual rates are much lower. For example, Jio has a Rs. 149 (2.1 USD) plan for 24 days for 1 GB per day. That works out to about 10 cents for a GB.
deleted 7y ago
[deleted]
sseth 7y ago
Well, it's not a monopoly by any stretch. Market share - Jio - 32%, Vodafone Idea - 29%, Airtel - 28%, BSNL - 10% as of Nov 2019. Yes - the incumbents (Vodafone, Airtel) have suffered a loss of market share and revenues / profits. Serves them right for keeping data rates high and not investing in modern technology when they had the money and market share to do so. I am sure customers in other markets would wish for real competition like this.
- signal11 7y ago
  The situation is much more complex than you describe. The telecom sector has been has been hit with arbitrary regulation and tax laws that have disproportionately impacted existing players. One of the reasons Vodafone has deferred investing is because of uncertainty around the massive tax burden in a 16-year long tax dispute because of a rule the telecoms department made up referred to as “Adjusted Gross Revenue”, which all providers appealed in the courts over years (and lost). It’s a huge tax that significantly eats into providers’ ability to invest. Faced with it, most other providers have simply exited the market. To add to this, the regulator is hand-in-glove with Reliance Jio, which is the new kid on the block and very well connected politically. Some background: https://thewire.in/tech/reliance-jio-telecom-regulation-trai-anil-ambani https://thewire.in/tech/reliance-jio-telecom-regulation-trai... Unsurprisingly the only mobile service provider doing well is the one which is well connected politically. Now the government is waking up to the shit-storm its policies have created, and are considering tax deferments for the existing mobile providers. In short, mobile services’ regulation in India has been very poor. And the outcome is that from 6+ healthy telecom companies, there is now one healthy company, one scraping by, and one ready to quit. I don’t believe customers in other markets would want this outcome.

notyourwork 7y ago

Which companies stand to gain most financially from this growth in a new market?

pimmen 7y ago
If you have an app that solves something we take for granted in the West, and the initial cost barrier is very low, you have a great business model for the Indian market. When WhatsApp cost $1 per year it had a terrific business model for the emerging markets. Now that it’s free Facebook is complaining that they don’t make enough money.
wtmt 7y ago
IMO, it’s the ones that have a lean, low cost, low price, high volume model for their products or services. India is a highly cost sensitive market and there’s hardly any kind of customer stickiness that can be taken advantage of. Even mobile number portability has huge numbers reported every quarter where people switch, while retaining their phone numbers, between the four main providers (among which three are in doldrums) who have survived the brutal costs and truly ruthless competition.

techie128 7y ago

This is great news for India as more people are gaining access to the Internet. However, this is only one side of the story. The ARPU (Average Revenue Per User) in India is around 72 INR which is approximately 1 USD per month. For the US, it is approximately 50 USD per month. This figure makes a big difference as far as the revenue opportunity is concerned. This affects telecom operators a lot more than mobile phone manufacturers. India is also one of the fastest growing economies in the world. It is expected that not only more people will come online but also the per capita income will grow rapidly that will make it more lucrative in the future.

Symbiote 7y ago
Is that $1 or $50 only the user's cost of the service (for calls and data), or does it also include spending on apps, in-app purchases, paying a debt on the phone and so on? If it's just the service, $50 seems very high for an average. The most expensive phone service contract I can find here in Denmark is $45.
- lotsofpulp 7y ago
  Depends what kind of service you want. Best coverage and minimum throttling is $70 to $80 per person (Verizon and ATT). Being on family plans can bring it down to $40 to $50 though. Minimum is $30+ on Sprint or T-Mobile.
  - nicoburns 7y ago
    I guess a lot of it is the difference in population density, but that does seem expensive. In the UK, you can get top-level coverage (O2's network) 80GB 4g with unlimited calls/texts for £20/month (~26USD). I currently pay £10/month for 6GB, which is a lot worse value per GB, but more than covers my needs.
    - 7ewis 7y ago
      Pretty easy to get cheaper deals too when you've been a customer for a few years. I pay £5/m for unlimited data, 600mins, unlimited texts on Three. I know I've been super lucky with that deal in particular.

ThomPete 7y ago

Its important to distinguish between internet users and internet consumers. Only India 1 (115 million) have the money to really spend, they are consumers. India 2(approx 450 mio and are those who in large parts work for india 1) have older smartphones or feature phones and only some of them have money to spent. A lot of bad vc investments didnt make that distinction and got hurt. None the less lots of opportunities there for thos who can find products or services india 2 can afford.

killjoywashere 7y ago
Is there a formalization of the Two Indias concept in the economic literature or market reports?
- iso947 7y ago
  I assume “India 3” would be the other 500+ million?
  - tangoalpha 7y ago
    I was wondering the same. As the numbers didn't add upto the population.
  - ThomPete 7y ago
    Yup India 3 is the rest.
Merrill 7y ago
Is the market also segmented by language community?
- thrwaway69 7y ago
  Actually it's not that bad compared to some of the other countries. While we do have too many regional languages and dialects across states, people are usually bilingual.
- 7y ago

baybal2 7y ago

Indian cellphone market is dominated nearly completely by Chinese brands

GoodGOYIM 7y ago

poo in loo

pretty_dumm_guy 7y ago

This has been fueled by cheap internet rates promoted by Jio and followed by other players in the market. I really appreciate this development as this gave access to countless business and introduction/improvement of few others too. However, I am worried that this development has been led without proper framework to tackle issues like privacy, fake news, surveillance etc.,