Are Domestic Mobile Phone Manufacturers such as Spice mobiles On The Verge Of Extinction?


India’s mobile landscape has seen a sea through change in the new millennium. In the early 2000’s, mobile phones were becoming a craze among people, including the low-income households. Owning a mobile phone was a luxury statement and there were not many low cost mobile phones in the market. This led to the entry of domestic mobile phone brands such as Karbonn, Micromax and Spice mobiles. At first, they used to offer low cost mobile phones with larger colour screens and really loud speakers which attracted people. Any person could play multimedia files in their phones for entertainment. The facility to playback multimedia was not offered by handsets from top brands such as Nokia, Motorola, Samsung or Sony Ericsson at that time. Soon these local brands became popular in the low price segment due to huge demand not only from low-income households but also from price conscious minds.

Fast forward to 2012, even though these domestic brands are now worth multi-million dollars, they haven’t been able to find a proper foothold in the premium market.  Save for Micromax which holds 10% of the market share, the remaining domestic players have hardly managed to create a splash. Let’s have a look at some reasons why they couldn’t compete with international brands and how can they improve in that regard.

Why Domestic Mobile Phone Brands Couldn’t Compete With International Brands?

After the success story of Android, domestic players clung on to it and started selling low-cost smartphones which are actually re-branded Chinese products. They enjoyed the monopoly in the low-cost smartphone segment until Samsung entered that segment with a big bang and strong marketing targeted towards the youth. Lava and Micromax even tried to enter the premium smartphone segment by launching phones like Xolo X900 and Superfone A85 respectively, which actually has good hardware and performance. But they are yet to make any kind of presence in that segment due to the following factors.

Brand Consciousness & Recognition – The biggest reason which is holding back these domestic brands is, the brand recognition and brand consciousness. As these brands confined and limited themselves in the low-cost segment, people have identified them as cheap brands. Their brand image is not in good shape and even though phones such as Lava Xolo X900 perform really well, people prefer international brands.

Remarks Of Poor Product Quality – Poor product quality has been one of the biggest gripes from consumers as they mostly find the devices made using poor quality materials. People constantly complain about the build quality and performance of devices from these brands. Sure, they are offering their devices at cheaper prices compared to others; there still needs to be some level of quality control which gives people a feeling of assurance.

Lack Of Real Innovation – The efforts from Micromax for innovation using the personal voice assistant Aisha (an Apple Siri rip-off) and hand gestures (used in Superfone A85), mostly turned out to be gimmicks. There has not been any real innovation from any of these domestic manufacturers so that they can get international recognition.

What Can They Do Improve Their Image?

Improving After Sales Service – People really care about the after sales service and there are very few service centers where you can get your phone repaired if you buy a phone from the domestic mobile phone brands. These brands should now really work hard to increase the service centers across the country and improve the quality of experience people face during the after sales service.

Investing in R&D and Improving Product Quality – As these brands now have a good amount of cash in their hands, they can think to invest more in research and development of products by opening more research centers. Brands such as Spice Telecom which is now acquired by a cash rich conglomerate such as Aditya Birla Group (owner of Idea Cellular) can really focus in this area to rise above the level of other domestic players.

Constantly Hitting High End Market with More Models– There has not been a very hard effort from domestic players to launch premium phones. They launched only a couple of phones in the mid-range and premium segment. After their premium models failed to gain much traction, they didn’t try to improvise their efforts with more and better models. They need to launch more premium devices even if they fail just to show people that they are no more cheap brands and this will help them a lot.

Constant Software Updates To Smartphones – As all the smartphones from these manufacturers will be Android based, providing constant and latest operating system updates to their smartphones will portray a very good image in front of the consumers. Android users are now more conscious about being able to receive latest version of operating system on their phones and these updates are now a part of buying strategy of the users.


After the aggressive entry of top brands like Nokia and Samsung into the low end smartphone and dual SIM mobile phone range, presence of domestic manufacturers is constantly being challenged. Now these domestic players do not have a distinguishing point other than the price tag. Due to bad brand image, people would like to spend more to buy models from the top brands if the price difference between them is less. If these domestic manufacturers do not bring in some amount of innovation in their products and improve the quality of their products rather than just copying other brands, their future seems to be really shaky.

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