Why there is so much competition between smartphone manufacturers

The mobile phone market is now dominated by multiple brands, leading to tough competition. We take a closer look at how and why this happened. Back in 2013 and 2014, there were only one or two international brands such as Nokia and Samsung that were leading the Indian smartphone industry.

It was later on that other brands such as Vivo, OPPO and Realme started entering the market, and began tussling for larger market share. Today, we have intense competition in the smartphone market, and this began when Xiaomi entered the country in 2014.

By the time it was 2016, the Chinese giant had gained a foothold in India, and it was clear that they were preferred by Indian customers who didn’t want to spend too much on a smartphone. The Chinese smartphone models were such that Indians didn’t need a massive budget to own a smartphone with top-notch features.

Brand ethos, ability to produce phones with multiple features, competitive pricing, and a lot of other factors worked in the favor of the Chinese brands and Xiaomi in particular. This has caused other brands to compete with Chinese brands on all fronts.

To understand how we got here, let us take a closer look at these factors in detail and understand how this happened.

Feature-Rich Models

Almost all brands nowadays offer phones with multiple features and high-quality specs at pocket-friendly rates. Nearly every other mobile phone by any brand now comes with fast processors, great quality batteries, good RAM sizes, and multi-rear camera arrays, all for a price below Rs. 15,000.

Finding the balance between price point and features has been the unique ability of some brands. They can therefore offer feature-rich phones at budget-friendly prices.

These brands have become the first preference for customers, which in turn intensifies competition. For instance, Vivo phones under 10000 come with excellent cameras, decent RAM sizes, and fast processors.

Competitive Pricing

Nowadays, it has become common practice for smartphone brands to try and compete with each other by offering phones that have the same features and specifications but at a price that is lower than the other.

This method, termed competitive pricing, offers the brand’s product at a price that is cheaper than that of their competitor and is done with a strategic thought process in place.

While brands like Xiaomi and Realme started offering some of the best mobiles under Rs. 10,000, brands such as Samsung also started the following suit. Pricing became all the more competitive as the number of brands and the mobile phones they offered started increasing in this regard.

Today, because of this phenomenon, consumers can easily buy some of the best phones of a premium brand with excellent features, but at a price between Rs. 10,000 – Rs. 20,000.

Growing Mid-Range Segment

The burgeoning middle class in the country is one of the main drivers of budget-friendly smartphones. These people prefer mid-range smartphones, leading to massive growth in this segment.

What this essentially means is that the brand that manages to capture the mid-range segment will have a large profit turnover. This is one of the biggest reasons why a lot of brands are vying to get a firm foothold in the mid-range segment.

Market Domination

As the mid-range segment becomes a priority for all brands, it is a given that the brand which will successfully dominate this segment will inevitably become the most popular brand in the country. Therefore, the mid-range segment will end up becoming the battleground for all smartphone brands.

As all brands get ready for intense competition over the next few years, it has been forecasted that even 5G phones will soon be priced for lower than Rs. 20,000. This is against the earlier belief that 5G models would be expensive.

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