Calcutta based Supertron is entering the mobile handset business with the launch five new handset models under the brand i-Super. Supertron is a national distributor for companies like Seagate, Acer, Dell, LG and IBM. It markets and sells products like computer, netbooks, laptops and peripherals to resellers and retailers across India. It has a turnover of 900 crores. Seagate and Acer, Supertron’s biggest clients, contribute to 49% of Supertron’s turnover.
Supertron has two existing brands Supercomp and Solitaire. Under these brands Supertrons sells computer peripherals like casings, keyboards, mice, webcams and headsets.Supertron will be venturing into distributing mobile handsets along with launching its own branded mobile phones. It will be distributing Acer smartphones which are priced from Rs 9000 – Rs 36,000.
Supertron hopes to sell 100,000 iSuper units with a turnover of Rs. 20-30 crores. Is that possible?
India Inc sold 38.63 million mobile phones in 3 months (Apr 2010 – Jun 2010). New mobile connection during the same period were 51.21 million during the same period. For every 10 new connections there will 7 new mobile phones sold. Number of mobile handset vendors jumped from mere 5 in March 2008 to 35 in June 2010. The unofficial numbers are at 100.
Even if the handset market is looking crowded with Bharti entering the market with its Beetel brand, there is a hope of getting the 6th or 7th customer for every 10 new connections. Phones can be sold to customers who are already having a phone. Mobile phones like all gadgets are expensive bananas. The shelf life of a banana is a week and for a mobile phone it’s two years. I am currently holding my fourth phone in five years. I started with a Reliance-Samsung handset, then bought Sony Ericsson K750i which I exchanged for a Samsung J150 which made its way for iPhone 3G S – most expensive gadget I have ever bought. Which means the shelf life is little over a year and less than two. And that is where all these new handset makers have a chance.
The product portfolio for a new vendor can be targeted at the first time phone owners as well as the existing phone owners. There is an important third dimension to it. The rural connection. If you are not doing rural then you are not doing it right. Let me tell you why.
Don’t be intimidated by 700 million number as it doesn’t reflect the true number and in turn doesn’t show the true market opportunity. You know what they say about the statistics and the bikini connection :
Statistics like bikinis, reveal the most trivial and conceal the most important.
The 700 million phone connections are heavily concentrated towards urban areas which now enjoy a tele-density of 128%. Which means for 100 people there are 128 phone connections. All the connections are not necessarily active. There could be people in urban areas without phones and there could be people in urban areas who have three active connections and two inactive connections. As per some estimates as much as 50 million phone connections are inactive connections.
Rural subscribers are 210 million with a tele-density of 26%. And we know that two thirds of India’s population lives in rural areas and only one third of the total subscribers are from rural areas. The actual opportunity for a handset maker is more than 74 people in rural areas – a potential gold mine.
Mobile handset market in India will be a long tail for the next 5 years – at least. There will be choices. Sometimes way too many. That’s where we TheGadgetFan (TGF) come into picture. To help you make an informed choice.