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SMARTPHONE MARKET & TRENDS

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Introduction

Smartphone Market Overview

Drivers & Challenges

Market Opportunities

Market TrendsSmartphone Player Profiles

Smartphone Price & Specifications

Strategic Recommendations

Distribution & Retail

Tablets Market Overview

Growth DriversContent Scorecard

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Market

There were around 11 Cr Smartphone units sold in the first 2 quarters of 2012

Sales for Micromax, LG, RIM among other declined, Samsung continued its

dominance and Nokia held on to its leadership position by a thread.

Android continued to increase its OS market with a market share of 70.8 %

Drivers:

Increase in disposable income

& change in consumer behavior

Introduction and spread of 3G and

other next generation cellular networksConstant reduction in Prices

Challenges:

Low penetration in rural areas

Security & Privacy concern

Battery life

High 3G tarrif plans

Dual sim smartphones were introduced and are becoming popular

Rise of the Phablet

High resolution touch screen interface

Multi Core processors

HD recordings & high resolution cameras

Drivers &

Challenges

Market

Trends

Smartphone

Player ProfileSAMSUNG NOKIA APPLE Inc

HTC Research in Motion LG Electronics

MAJOR PLAYERS

EXECUTIVE SUMMARY

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SMARTPHONES MARKET OVERVIEW

Jan-12 Feb-12 Mar-12 Apr-12

40.1 41 39.8 36.6

24.6 22 25 28.1

9.7 9.6 8.8 9.510.3 12.2 12.9 12.615.2 15.2 13.6 13.3

Monthly Price Class % Share

Samsung grew its market share to 48.2% while Nokia

with its Lumia phones showed steady signs at 24.2%

Android continued its dominance, Microsoft had very

limited penetrationsIt has been 7 quarters since the release of Windows

Phone and the platform's market share is still

languishing below 2%

People are willing to pay more for smartphones

Smartphone market in India is driven by youth demand and

falling prices of smartphone devices

Gartner Sep 12

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1 in 10 smartphone user in urban India lives in a Metro

Over 27 Million smartphone users in urban India

Nielsen July 12

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USAGE

PATTERN

Smart phone usage between the age group of 18- 29 is the highest.

56% of smartphone owners in India prefer accessing Internet multiple times a day through their

phones.59% of males access the Internet more through smartphones versus 48% of usage by females.

78% of smartphone owners indulge in searching from their device, 77% of smartphone users in India

like listening to music on their smart device and close to 35 % of smartphone owners either

read newspapers, book and magazines or watch TV and close to 33% enjoy playing games.

97% of smartphone owners are heavy users while at home. Men have a higher usage of

smartphones when at work with close to a figure of 80% as compared to 71 % women at work.

While people are engaging more into online shopping it is found that 40% of smartphone owners do

not feel secure to purchase online through their smart device and prefer PC/ laptop for the same.

Google Survey July 2012

Nielsen

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Factors favoring growth

High disposable income among the target age group

Continuous fall in Prices

Introduction of New entrants in the market

Availability of apps

Adoption of 3G and wifi

Social networking

Connected world philosophy

declining smartphone prices in the past year and growth

in the variety of models available has spurred sales of

both low-end smartphones in regions like Asia Pacific

Wayne Lam, IHS

CC India Feb 12

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Social Networking properties

(apps/sites) are the most accessed,

second only to search

- Facebook leads the list, Google+

comes in second

- A whopping 93% of Android

Smartphone users in India use

social networking on their

smartphones.

Nielsen Informate May 12

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Google Apps are dominating

in every segment except in

social media and chat, where

facebook and Nimbuzz aredominating respectively.

Google apps comes first in

time spent categories

including Streaming videos,

GPS, email, and search. In

video streaming, YouTube

consumes 94% of time , while

86% of the time spent on GPS

is with Google.

Nielsen Informate May 12

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Challenges

Low penetration in rural areas; Tier 2 & 3 cities

Adoption of 3G continues to grow at a slow pace3G services and availability offered by Telcosremains to be below parHigh tariff plansBattery Life

ET Feb 12

Gartner Sep 12

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Market Trends

Total Smartphone Sales (000)

sep12

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Break up Units Sold (000)

GFK Nielsen May 12

Break up Market share

Gartner Sep 12

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SMARTPHONEUSAGE-ACROSSOS

157 193 138 111 76

BASE 6113 482962882 2887

With a time spent of more than 3 hours [193 mins] daily,Android users continue to dominate the Smartphone

usage in May 12 as well. With almost an hour difference, Symbian users followed next[138 mins]

The share of time spent on Brows ingwas highest amongst Windows Mobile users while Blackberry users

continue to have the highest share on Communicat ionbased activities.

As has been the trend, Symbian users continue to be the main users of Entertainment related activities.

Android users spent close to one fourth of their total time on Appl icat ions [23%].

Time spent

[Mins/ day]

BROWSING COMMUNICATION ENTERTAINMENT PHONE MANAGEMENT APPLICATIONS

All Figs in %

Nielsen May 12

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Indians and the Dual Sim

obsession

over 85 models among 20+ brands

71 million unique subscribers in India

who use multiple SIM cards accounting

for around 61% of the whole mobile

phone sales in the country.

youths who are college students,newly employed or working

professionals

7 out of 10 of those multi-SIM card

users polled into the survey intend to

acquire a dual-SIM mobile phone soon

Nokia now leads the multi SIM

mobile phone market with 30%

Samsung trails at 2nd position with

16%

HTC and Sony have entered the dual

SIM phone market Nielson

GFK Nielsen May 12

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The larger than tablets gadgets are slowly

finding favour with clients given their diverse

functions

They stand out on the mobile computing scene,

with their big screen sizes and extra capabilities

For the predecessors and upcoming phablets,

the market is responsive, with the promise of new

user experience

ABI Research expects 208 million phablets to sell

in 2015.

10 Million galaxy notes have been sold

worldwide

With rich media consumption on the rise on

mobile devices particularly as we get faster 4Gnetworks and more Wi-Fi networks to supplement

them a larger display is desirable

several domestic manufacturers are also foraying

in the category with low cost phablets to cater to

the needs of the budget conscious Indians

"One of the chief drivers for phablets is the amount of timepeople use their smartphones for Web browsing, reading articles,and newspapers on the go, or simply navigating their journeys,"said senior analyst Joshua Flood. - ABI

Why scroll and zoom when a larger display

minimizes such efforts? The rise of the

Phablet

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Price Class :

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Feature Price Index Multi coreCamera

RAM

LCD

Battery

Wifi,3G

Design

5K 10K 15K 20K 25K

F

E

A

T

U

R

E

S

PRICE

v

v

New capabilities include technologies that could change how

users interact with the devices and how the devices interact with

the environment

near-field communications (NFC), high-definition audio (HDA),

3D computing, future generations of voice recognition, artificialintelligence, advanced video compression, gesture sensingand

olfactory sensing (artificial nose).

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Telco AllianceGeography Distribution

Nielsen May 12

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CONSUMERDEMOGRAPHICSFORPREMIUMSMARTPHONE

Mumbai Pune Chennai

Businessman Youngsters Students

Youngsters Working professionals Youngsters

Working professionals Working professionals

18-25 Years 18-25 Years 18-25 Years26-45 years 26-45 years

Income Above Rs 20,000 Above Rs 10,000 Above Rs 10,000

Location South East Central

Work

Ages

Nielsen May 12

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May 12

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Retail Strategy

May 12

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May 12

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May 12

E l i T h l i

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Evolving Technologies

OVERVIEW OF TABLET MARKET

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OVERVIEW OF TABLET MARKET

Tablet PC Market: Worldwide

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Tablet PC Market

Tablet computers will accountfor 23 percent of all PC salesby 2015*

Worldwide Tablet PC marketsize in 2010 was nearly US$ 9Billion and it is anticipated thatTablet PC unit sales will cross100 Million Units by 2015.

Source: Forrester Research report

Tablet PC Market: Worldwide

Gartnersays Media Tablets

sales to reach 119 Million

Units in 2012.

T bl t M k t Si I di

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Tablet Market Size - India

Brand

Market

Share

Vol

(p.m.)

Vol

(p.a.)

ASP

(INR)

Val / INR Cr.

(p.m.)

Val / INR Cr.

(INR)

Apple iPad 45% 18,000 216,000 30,000 54 648

Samsung Galaxy 25% 10,000 120,000 20,000 20 240

Blackberry Playbook 15% 6,000 72,000 6,000 4 43

HCL 6% 2,400 28,800 8,000 2 23

Karbon 2% 800 9,600 6,000 0 6

iball 2% 800 9,600 6,000 0 6

Others 5% 2,000 24,000 5,000 1 12

Total 40,000 480,000 20,370 81 978

Gartner May12

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TABLETMARKETANALYSISOVERVIEW

30

20

6

8

66 5

(INR in thousands)

Apple iPad

Samsung Galaxy

Blackberry Playbook

HCL

Karbon

iball

Others

Average Selling Price

45%

25%

15%

6%2% 2% 5%

Market Share

Apple iPad

Samsung Galaxy

Blackberry Playbook

HCL

Karbon

iball

Others

Apples iOS leads the Tablet operatingsystem marketWith an increase in adoption of tablets in theemerging markets the share of Andr oid OS isexpected to growsignificantlyOf over 35 tablets launched in India, most ofthese run on Andro id OSSamsung g alaxy tab is the leader amongstall Android based TabletsApart from OS, Hardware features such asMemory, USB su pport and Battery l i feplaysa key roleOf all the retail channels that sell Tablets,

Large form at retai l stores sell the most

unless there is a significant drop in the prices, theadoption will remain in the niche circles **Gartner

Based on Secondary research, source :world wide web

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GROWTHDRIVERS

Faster DataConnectivity

User

Experience

Relevant

Content

RETAIL

EDUCATION

ENTERPRISES

TELECOM

Affordability

User

Experience

Aspiration

Utility

Tablet

Value

Propositio

n

One of the key reasons for introduction of low cost smartphones and Tablets and therebyincrease in the sales of players like Micromax, HCL among others is the aspirat ionalvalue attached with these gadgets.

IMPORTANT

-Rich interact ive

UI

-Screen Qual i ty

-Processing

Power

-Battery Life

-Appl ica t ions

-Content

-Ease of use

Based on Secondary research,source : world wide web

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CONTENTSCORECARD

84

5852

4739

0102030405060708090

Top Categories

Volume (000)

0%10%20%30%40%50%60%70%

68%62%

54% 54% 52% 52% 51%

Top Utilities

Tablets predominantly are being used for brow sing & entertainmentAdoption in education sector and for young parents is visible

While retail users specifically use it for enterta inment and info purposes, enterpr isesegments it for its mobility and cl ient presentat ionsLack of consumer centric file management systems and dif f icu l tyto composespreadsheetsdoesnt make it conducive for adoption by enterprises on a large scale.

Based on Secondary research,

source : world wide web

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RETAILUSECASES

Corporate

Professional

s

TechSavvy/Gadget

Crazy

High EndYouth

MassMarket

Portability

Connectivity on the

move

Email & InternetAccess

Client

Presentations

E-book reader

Writing &

annotations

Applications

Connectivity on

the moveEmail & Internet

Access

Multimedia

Gaming

ApplicationsEmail & Internet

Access

Multimedia

Gaming

MultimediaBasic Internet &

email access

E U C

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ENTERPRISEUSECASES

Media Tabletshave a role to

play in the

enterprise

segment.

Education

sector has

shown earlyadoption with

govt taking

various initiatives

to bring in a low

cost tablet

Many

industries are in

a pilot mode Weather Briefing Fight charts Billing

Check-ins

Airport directory

Curriculum Interactive Apps

Online Streaming

E-commerce

POS Online Catalogs

Digital Signage

Digital imaging

Billing Patient Education

Records/MIS

Healthcare Retail

AviationEducation

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POINTSTOREMEMBER

The Indian tablet market is seeing good growthbut experts warn that the industry might find itdifficult to sustain this growth unless playersmake an effort to develop an ecosystem.

Based on Secondary

research, sourc e :

wor ld wide web

About 350,000 units of media tablets weresold in the first quarter of 2012 alone,compared to the 475,000 units in the calenderyear 2011**Cyber Media Feb 12

availability of highly digitized content and a good 3G

and 4G network coverage are the key ingredients of theecosystemThe quality of experience is what will define asuccessful tablet.

Education and healthcare will be the key sectors wheretablet adoption will continue to witness a good uptake

unless there is a significant drop in the prices, the

adoption will remain in the niche circles **Gartner

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