Betting On Premiumisation
Brand Motorola is back in the reckoning if its performance in the recent past is any indication. Its India revenues have trebled in the last three years. Two of its premium flip phones, Razr 40 Ultra and Razr 40 were bestsellers in the Amazon Prime Day sale in July this year. And, so far in 2023, the brand has seen at least 10 launches across price points in the 5G category.
As per International Data Corporation (IDC) that tracks the global mobile handset sales on a quarterly basis, the 5G smartphone category continues to see increased penetration. In the first half of 2023 (January-June), nearly half of the 64 million smartphones shipped were 5G smartphones. “5G smartphones continue to increase penetration in the low-end price segment and we should expect a strong 5G play in the USD150< USD 300 segment in H2 2023 as high-end 4G models vacate the space,” says Upasana Joshi, Research Manager, Client Devices, IDC India.
And 5G is precisely the space Motorola in India is expanding in, along with the premium segment (USD 600+) or smartphones priced Rs 50,000 and above. Motorola already has a 9 per cent share in the overall smartphones pie and boasts the biggest margins among handset makers.
Prashanth Mani, Executive Director, Asia Pacific, Motorola elaborates, "Our premium category has seen a 2X YoY and the 5G category has seen an 8X YoY growth." What distinguishes Motorola is its leadership in design and colours with its partnership with Pantone. They not only help curate colours but also give inputs on design including material and finish, says Mani. "Our innovation in form factors like foldables and our software experience which is giving consumers much more than what consumers are being provided today across price points with features like security and the ability to power multi-device experiences," adds Mani, citing the reasons that are helping Motorola clock record growth.
Of course, the ability of Motorola to bring the latest and the most advanced features first to market at accessible price points is being widely recognised, says Mani.
5G Category & Foldables
5G plays a pivotal role in Motorola's strategic focus due to the burgeoning adoption of 5G devices within the Indian market. Motorola has experienced exponential year-on-year growth, expanding 8-fold in the 5G category, earning recognition as India's premier 5G smartphone brand in 2023, says Mani. "Our commitment is to sustain this momentum by offering top tier 5G products across various price ranges, ensuring the finest in 5G connectivity, hardware and software features to deliver an unprecedented 5G experience to Indian consumers," adds Mani.
Basically, Motorola’s strategy revolves around providing a versatile array of 5G devices that ensure seamless connectivity experiences. Motorola devices excel by supporting the maximum number of 5G bands, delivering superior speed and coverage. "By integrating 3 Carrier Aggregation and 4X4 MIMO technology, our smartphones establish a robust 'data highway' for unparalleled 5G experiences, catering to diverse budgets, including the affordable segment (Rs 10-20k)," explains Mani.
Talking about the upcoming products, the moto g84 and moto g54, Mani says the moto g54 stands as India's first 12GB+256GB 5G smartphone in its category, boasting a market-leading 6000mAh battery and a pioneering 50MP OIS camera for exceptional content creation. Meanwhile, the moto g84 introduces Pantone colours to the g-series and features an ultra-vivid 120Hz, 10-bit billion colour display, Mani informs.
As per IDC data, the foldable market is expected to see 5.6 times unit growth globally by 2026 and India is also experiencing rapid growth in this area. Motorola has been leading in this segment and has launched four generations of devices.
Intense Competition
Overall, the Indian mobile handset market is shrinking. In the first six months of 2023, the total smartphone market saw 64 million handsets shipped, a 10 per cent YoY decline. And this cannot be good for all handset makers. But why is this happening? Overstocking is one reason, say experts. That is why the vendors and channels are focused on clearing the inventory by offering discounts, special schemes and price drops before the start of the festive season in the second half of the year, says the latest report by IDC Worldwide Quarterly Mobile Phone Tracker.
"Consumer demand remained sluggish amid uncertain macroeconomic conditions and inventory levels were elevated because of high stocking in 2H22," the report says. After several quarters of growth, the average selling price also declined by 8 per cent QoQ in the second quarter of 2023. The share of the sub-USD 200 segment saw a 11 per cent dip in prices YoY. The mid-range segment (USD 200< USD 400) remained flat with a 22 per cent share, while the mid-to-high-end segment (USD 400< USD 600) with a 5 per cent share, grew 34 per cent YoY in Q2 of 2023, as per the IDC report. That is why brands like Motorola are focused on the mid-range, the mid-to-high-end segment and the premium segment by offering choices at attractive price points, surmise experts.
Will the upcoming festive season see stronger demand for smartphones? “The market requires strong double-digit growth in the next few months to see an overall annual growth in 2023, which looks unlikely as of now," says Navkendar Singh, AVP – Devices Research, IDC.
But Mani is hopeful of robust growth in the coming quarters. "We feel that the market will stabilise in H2. As per the IDC report, in Q2 23, the market expanded by 10 per cent over the previous quarter, with the premium segment experiencing the most growth at 75 per cent YoY, resulting in a 9 per cent share. Our strategy of expanding our premium offerings with razr and edge series, plus acquiring share in the 5G segment through our Moto-g and e series of devices, aligns perfectly with this trend," he says.
