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Google Wants To Break Into India'S Ultra Low End Smartphone Market. What Is It Trying To Do?

2020/7/28 12:07:00 0

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One wave is not smooth, another is rising again. India's smartphone market will usher in a new "Challenger" -- technology giant Google.

Recently, after investing US $4.5 billion in the Indian digital platform Ji platforms to acquire 7.7% of the company's shares, Google announced the next step: they will jointly launch customized OS for ultra-low-cost smart phones, and the cooperative products are expected to be released in 2021.

Tang Ding, an analyst at counterpoint, told 21st century economic news that Google's cooperation is similar to the cooperation between kaios and reliance Yao to launch the 4G function computer Ji o phone in 2017. At that time, just one year later, this kind of Jiu phone quickly became a popular model in the local market. "It is this model that has brought India's 4G users to a milestone of 100 million. Let India become the country with the shortest time to accumulate 100 million 4G users in the world. " She continued.

Interestingly, kaios, a system rarely heard of by the Chinese public, is backed by Google, which is an open-source mobile operating system based on Linux, designed for function machines.

Google, which is good at software, actually has its own smartphone brand, called pixel phone, but because of its high-end positioning, it has never been released in the Indian market.

At this time point, Google's move is particularly prominent: at present, China's smart phone brands are facing brand crisis caused by national sentiment in India's local market, and under the influence of the epidemic situation, the production capacity has been controlled by the government at 33%. Can Google start a new war in India's smartphone market with the support of Jiao, a subsidiary of India's largest telecom operator?

The answer may not be.

Google's Indian smartphone ambitions

For all manufacturers with hardware R & D capabilities, India is undoubtedly a rich mine far from exhausted.

In other words, "new market share" or "new market share" should not be interpreted as "new market share". This is also a comprehensive consideration of India's current mobile phone development stage.

During the year of 2017, the ultra low price of 4G phone users was quickly accumulated in the market, that is to say, the super low price strategy of 4G phone users in the market.

According to the statistics, the number of 4G units will be about 19 million in 2018, but the number of products will reach about 18 million in 2017.

This shows that its strategy was very successful at that time, and the background of the operator made Jiu the core force to promote this transformation, which is still the case today.

"We expect that Jiu will extend this strategy to the field of smart phones and cooperate with Google to launch 4G / 5G smart phones with ultra-low price and even 0 rupee, guide the users of functional mobile phones to upgrade to smart phones, further boost the penetration rate of Indian smart phones, and stimulate the traffic consumption of users on the Ji o platform." She further analyzed.

Objectively speaking, Tang Ding believes that there are still about 350 million functional machine users in India today. Ultra low price positioning, OS and interface in line with local entry-level users' habits, hardware + service deep binding and other promotion plans, as well as India's government's support for the digital economy, will be conducive to the success of Google Ji.

However, behind the gathering of Chinese manufacturers in India's top-level camp, China's mobile phone industry has built a complete production chain in the local area. Can jio realize the mass production and implementation of smart phones under $100?

Tang Ding pointed out to reporters that in fact, this is not difficult. "The hardware of the 4G function computer Ji phone is OEM made by Chinese ODM design manufacturers. Google and Ji are mainly co developing OS, and it is expected that the hardware OEM of this entry-level product will also be outsourced to Chinese ODM manufacturers. " According to her analysis, most of Xiaomi's mobile phones, which are delivered locally to top 1, also need to rely on ODM design and procurement and EMS OEM mode, so as to reduce the cost.

In fact, Ji's strength can not be underestimated in the local area. Tang Ding told reporters that Ji o is not only an Indian telecom operator, but its parent company, Ji reliance group, has monopolized many industries such as local communication, energy, pharmaceutical, textile and retail, and is the largest chaebol group in India.

"The brand appeal of Google and Jiu, as well as the strong financial resources, channel coverage and promotion ability of geo in the local area, as well as the powerful platform integrating hardware, content, e-commerce, cloud, payment, application and other products, are the backing of the hardware products of Jiu." It is expected that they will achieve the lowest profit in the market through the combination of product flow and hardware innovation.

As a result, Google's ambition to enter India's smartphone market is obvious. Compared with the meager profits generated by smart hardware in the gear of less than $100, Google should pay more attention to India's huge demographic dividend, which brings considerable software revenue.

By 2025, the population of India is expected to exceed 1.3 billion in the world.

Cliff style declining market and counter trend consumption

However, under the impact of the epidemic, the current situation of India's smart machine market does not look so good, of course, this may be short-term.

Canalys, a research organization, previously reported that India's smartphone shipments plummeted by 48% to 17.3 million units in the second quarter of 2020 as India faced an unprecedented economic blockade due to the outbreak of new crown pneumonia until mid May.

Counterpoint's statistics are close to that. The agency estimates that in the second quarter, the Indian market saw a 51% decline in the number of intelligent machines and 68% in the number of functional machines. The decline in the functional machine market is more than that in the intelligent machine market.

"We can see that the unemployment rate in India exceeded 20% in the second quarter, and hundreds of millions of people lost their jobs. Most of the unemployed are expected to be low-income people in India, especially the blue collar class." Tang Ding reminded reporters that this part of the class is the target consumer group of functional machines and ultra-low-end intelligent machines, and their work nature and income are greatly affected by the closure of the city. Therefore, according to the data, the decline proportion of the low-end market is more serious than that of the medium and high-end market. The middle and high-end market is mainly affected by offline store closure, supply chain delay, customs delay and other factors.

In fact, it seems that the extra pressure of smart machine is still increasing in India for many years.

A Chinese mobile phone channel manager in India told the 21st century economic report that even though local authorities have banned all kinds of software developed in China, the sales of China's smart phone brands have not been affected in fact. To be exact, it should be "growing against the trend".

Of course, not only domestic top brands, but also Samsung, which has invested heavily in the low-end market in the past two years, has also gained dividends. This reflects that the local market is in a huge shortage of supply.

"Many brands on our platform are out of stock, and this month I have purchased a lot of new goods from other places." The source pointed out that the current number of smart phones in the Indian market can be described as "scarce", especially focusing on products with a price range of $100-200, which has been a hot selling price range in India for many years.

Canalys analyst Jia Mo also told reporters that in the Indian market, the current best-selling mobile phone price range is within 100-150 US dollars, generally speaking, the price is not very high, which is also the reason why the current Indian market is still in a short supply environment.

"India's smart machine market is different from other places. China and Europe have already entered the saturation period, but India's demand for low-end machine replacement has been very strong, far from reaching the saturation point." He further pointed out that because the average price is low enough, and China's four top brands are frequently updating low-end models, in fact, the demand for aircraft replacement will not reach the level below the resumption rate of only 33%.

This profile shows that in fact, the price segment of China's mainstream manufacturers gathering in India's smartphone market is actually clearly separated from the range that Google aims at this time.

Tang Ding also pointed out to the 21st century economic reporter that from the perspective of macro communication iteration nodes, it is more mature for Yao to enter the intelligent machine market at this time. "However, we expect that in the short term, the impact of Google Jiu on Chinese head manufacturers hovx (Huawei, oppo, vivo, Xiaomi), realme and oneplus will be limited, because Chinese manufacturers in India mainly target markets above US $100, while this product is expected to target ultra-low-end markets below US $100. But it is likely to bring competition to its brands and local Indian manufacturers. "

 

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