Turn around and everywhere you look, you’ll see someone paying through their smartphones. From working executives paying for their chai at the local tapri to street hawkers accepting payments in digital wallets, smartphones have empowered each of us, making us part of a growing economy. Apart from financial inclusion, consumers have quickly moved to video calling, content consumption, and casual gaming on smartphones. Since the pandemic, smartphones have fueled the growth of online classes and entry-level or sub-Rs 10k smartphones have enabled consumers in the segment to access these classes and create a good future for themselves.
Sub-Rs 10K smartphones: Lifeline of the country
Sub-Rs 10k smartphones have become the lifeline of a country like India where a large portion of the population still belongs to the low-income group. The pandemic presents a significant example of how sub-Rs 10k smartphones have helped change lives and keep the wheels turning in India and around the world. The sub-Rs 10k smartphone offers internet access that allows users to access a wealth of information; from being up to date about current issues and health advisories to attending online classes, these smartphones have become a game-changer for consumers in the segment. Additionally, entry-level smartphones have promoted financial inclusion by not only making digital payments accessible but also providing access to various financial services such as online transactions like transferring money using mobile banking, paying bills and even availing loans.
Entry-level smartphones have also generated new job opportunities. Thanks to affordable smartphones, many people are signing up to be delivery partners for e-commerce, food delivery and ride-sharing companies, businesses that operate out of their homes and more yet. The list of benefits can go on and on; however, the underlying message is clear: sub-Rs 10k smartphones have enabled consumers in the segment with access to information, entertainment, financial services, and job opportunities, thus promoting more economic integration and strengthening.
With smartphones having such a significant impact on the sub-Rs 10k segment, the critical question to ask is “What do consumers in this segment really want from their smartphone? What do they consider the determining factors for their purchase consideration?” The answer is ‘Value for Money’! For consumers in this segment, a smartphone is an important asset, an enabler that facilitates their participation in the digital world. The main factors driving their purchase decision are good performance, great display and larger storage at a reasonable price.
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Roadblocks in the segment
In the past two years, especially during the pandemic, severe shortages of components like semiconductor chips have significantly dented the growth of the sub-Rs 10k smartphone segment. With the shortage of components and chips in the market, the production of entry-level smartphones has been affected, which in turn has led to price hikes, affecting the affordability of phones in the segment. This was further exacerbated by the impact on revenue and earnings during the COVID-19-related lockdowns and growing inflationary pressures, resulting in consumers in the segment becoming more cautious in their spending. According to Counterpoint Research’s Market Monitor Service report in June 2022, there was a sharp drop in consumer demand quarter-on-quarter, especially in May and June. With the pandemic resulting in job losses and a drop in family income, consumers are choosing to repair their existing devices or buy refurbished ones rather than a new smartphone. And this trend has mainly affected the entry and budget segments.
Consumers, between the ages of 22-44, now want to upgrade their smartphones while spending wisely on them. Limited features in the entry-level smartphone segment such as low storage, poor display and camera features and weak battery, have further fueled the growth of the refurbished market in the country.
And so, as smartphone manufacturers in the country, we must aim to improve the consumer experience in this segment to capture the untapped potential of the market. From large displays for immersive viewing to large RAM memory and storage for smooth performance to large batteries for uninterrupted entertainment, significant features like these are sure to impress the masses in the segment, which makes sub-Rs 10k smartphones an attractive proposition.
Overall, sub-Rs 10k smartphones have promoted greater inclusion and economic empowerment among many in the country and will continue to do so. We need to move fast and offer products equipped with significant features at fair pricing, delivering an enviable price-performance ratio to consumers in the segment.
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