Mobile communication devices sales reached 427.8 million in first quarter of 2011 up by 19% driven by Smartphone, Android leads

Source: Gartner
Mobile communication devices sales up 19% while Nokia looses ground…
·      Mobile communication device sales in the world increased by 19% during first quarter of 2011 to touch 427.8 million
·      Nokia leads the market with 107.6 million unit sales followed by Samsung with 68.8 million
·      Although Nokia maintains its leadership position, it has lost significant market with share falling from 30.6% to 25.1%
·      Market share of Top 10 players declined from 71% to 65.8% indicating emergence of strong local competitors coupled with shift in consumer mindset

Android outclassed Symbian to become most widely used Smartphone platform…

·      Smartphone continues to gain popularity with sales of 100.7 million in Q1FY2011 compared with 54.5 million in Q1FY2010, increase of 85%
·      Share of Smartphone on total mobile communication device market increased to 23.6% from 15.2% in the corresponding period

·      During Q1FY2011, Android based Smartphone sales crossed 36.2 million compared with just 5.2 million in Q1FY2010. Rise of whopping 594%
·      Android market share improved from 9.6% to 36.0%
·      Nokia’s Symbian Smartphone operating platform lost considerable ground with market share dipping to 27.4% from 44.2%. Resulting in loss number of slot to Android
·      iPhone sales doubled to reach 16.9 million to grab third position from Blackberry

Indian wireless telecom subscriber base increased by 38.9% during FY2011 - West Bengal fastest growing market

Robust subscriber growth.....
·    India’s wireless subscriber base touched  811.6 million by March 2011 compared with 584.3 million in March 2010, growth of 38.9%
·    Active subscriber percentage is 70.7% which results in active mobile subscriber base of 573.9 million in March 2011
·    Bharti Airtel leads the market with 25.6% share followed by Vodafone (18.6%), Reliance (15.2%), Idea (14.5%), BSNL/MTNL (8.9%), Tata (7.8%) and Aircel (5.3%)
·    In terms of subscriber growth, Uninor topped with 434.5% growth while Aircel (48.8%) and Idea (40.2%) performed impressively. Airtel’s subscriber growth was 27.1%, lowest in the market
West Bengal fastest growing market…
·    Among 22 wireless telecom circles in India, West Bengal posted highest growth rate with 57.6% followed by U.P. (West), Orissa, Gujarat and Bihar (All non-UPA ruled states!!!)
·    Rajasthan is the slowest growing wireless telecom market in India with 27.7% subscriber growth followed by Kerala, Tamilnadu, Mumbai and Andhra Pradesh (All Congress / UPA governed states except Kerala!!!)

Vodafone leads West Bengal mobile telecom circle….
·    Total mobile subscriber base in West Bengal were 39.6 million by March 2011 while active subscriber numbers were 28.2 million which is 71.2% of total
·    Vodafone leads West Bengal mobile telecom circle with 33.4% market share while top 3 players accounts for 73.7% of active subscribers

India Wireless Telecom (March 2011) – U.P. (East) becomes strong No. 2 market, Idea catching on Reliance for No. 3 spot

Indian wireless telecom subscriber base crosses 811 million …

Indian wireless telecom market ends FY2011 with subscriber base of 811.59 million with addition of 20.21 million during March 2011 

Overall wireless tele-density stands at 67.98% (Urban – 150.06%, Rural – 32.75%)

Urban to rural subscriber ratio is 66.30% to 33.70%

According to VLR data, India had 573.97 million active subscribers. Hence, actual wireless tele-density in India is 48.07% by March 2011

Considering the fact that considerable proportion of mobile users own more than one SIM Cards, number of wireless telephone users per 100 people would be even lesser than 48.07%. (Probably near to 40% as ratio of number of SIMs per user is about 1.2)

Idea set to become No.3 wireless telecom player in India …

Idea cellular has 14.51% market share in terms of active subscriber base compared with Bharti (25.64%), Vodafone (18.63%) and Reliance (15.17%)

As per our analysis in last monthly update, Vodafone has strengthened its No.2 position while Idea is fast catching up with Reliance to become No.3 player

Idea benefits from high proportion of active subscribers at 93.07% (highest in the industry) compared with Reliance with poor 64.14% which below industry average

U.P. (East) becomes close No.2 behind Maharashtra….

Maharashtra continued to remain largest mobile telecom market in India with 47.3 million subscribers. However, No. 2 market U.P. (East) has narrowed the gap on leader with strong subscriber additions

U.P. (East) added 1.93 million wireless subscribers in March 2011 which is considerably higher compared with Maharashtra with 1.2 million

Tamil Nadu climbed up to No.3 spot at the cost of Andhra Pradesh which is No.4 market now.

Tata Nano: Late but not sorry! (April 2011 sales crossed 10,000 units)

Most talked about car in India….

Tata Nano can be considered as most talked about car in India after Maruti800. Ratan Tata’s dream car was launched in 2008 with a price tag of Rs.100,000.

The car was one of the most awaited and carried huge expectations. However, wrong marketing strategy, supply issues due to Singur controversy created by rift between CPM and Mamta Banerjee and cost pressure leading to price increase resulted in near collapse for the car by mid-2010.

Rough phase….

Nano is a low-cost product. Hence, cost efficiency and volume of sales became really critical. Tata’s suffered heavily both these front mainly due to factors beyond their control.

Capacity addition was delayed driven by adamant Mamta. The corrective action resulted in considerable loss of time. Till Sanand plant was ready, Nano supply was limited. Hence, it could not catch on initial buzz.

Tata Nano is nicked name as “1-lakh car”. However, massive increase in raw material costs led to price increase of car. Eventually, car had to break Rs. 100,000 barrier. Today, car is priced between Rs.1.35 lakh to Rs.2.1 lakh across India.

Biggest mistake Tata’s made was “Lucky Draw” for Nano. They actually overestimated their product and under estimated Indian consumer. Lucky draw could have been great idea in 1990s when market lacked competition. Today’s consumer needs to feel special and can’t stand in an queue for a product like Nano!!!

Secondly, issues such as car catching fire made huge dent in creditability of brand. Eventually, car sales plummeted to meager 509 units in November 2010.

Refocus, Rebranding and Repositioning…..

Thankfully, Tata Motors acted in a way which was desired to save this good product. Tata’s made some minor engineering changes to cleanup quality and reliability issues. They offered 4 years / 60,000km warranty to assure prospective customer. Marketing and advertising was more focused on target segment which is “common man”. Finance for car was made easier and simpler and most importantly, unconventional sales channels such as super markets (Big Bazaar).

Positive results of these efforts became soon visible for the company. Nano was back on Indian consumers’ mind. People started enquiring about the product. The Nano got it’s second life!!!

The car with targeted sales of 25,000 to 30,000 units per month finally crossed 10,000 mark on its way up to recovery path in April 2011.

Road ahead….

Although, Tata Nano has survived initial scare, it has still a long way to go. The positives are low-cost, strong brand power of Tatas, excellent distribution network and lack of competitive product in price band of Rs.1.5lakh – Rs.3.0lakh in Indian markets

Tata Nano also could benefit from the fact that India’s 2 wheeler market is more than 10 million strong. Even if Nano can tap part of that segment, it would create huge market for itself.

Although, Tata Nano is not the most profitable product for Tata Motors; it creates entry point for the company to sell costlier cars in future. Hence, Nano becomes important from long term strategic point of view for Tata.

It is expected that the segment in which Nano exist, monthly sales could reach 50,000 – 70,000 units per month in next 3-4 years. Although, competition from proposed entry of players like Bajaj and Maruti (possibly with Cervo) is expected to intensify ; Nano’s first mover advantage could create an edge.

Tata Nano Diesel…

Tata’s are masters of diesel cars. Tata Nano is also expected to be launched in “Diesel” version with two cylinder 700cc Engine which can offer mileage of 40km/litre. This means running cost of about 1 Rupee per km. This could be real game changer not only for the product but for entire automobile industry in India as well as in emerging markets.

Overseas markets...

Tata Motors is keenly exploring setting up overseas manufacturing base for Tata Nano. Possible regions could be Latin America, South East Asia and Africa. Moreover, the company is planning to export Nano is countries such as Sri Lanka, Thailand, Indonesia and Romania which could boost overall sales.