Prices of 4G smartphones expected to drop to as low as Rs.3,000 by year-end

Harigovind M

Saturday 16, 2016

Prices of 4G smartphones are likely to drop to as low as Rs 3,000 by the year end, making high-speed broadband accessible to more consumers on their handsets and providing the backdrop for the next battle among India's biggest telecom operators.

The rapid reduction in handset prices is being accompanied by speedy 4G rollouts by market leader Bharti AirtelBSE 0.64 %, followed by rivals Vodafone India and Idea CellularBSE 1.15 %, in anticipation of a commercial launch of similar services by Mukesh Ambani-owned Reliance Jio Infocomm.

Little-known Chinese handset player Phicomm, this week, became the first handset maker to offer a 4G smartphone for Rs 3,999, including discounts. And that could be bettered shortly, with Micromax Informatics, India's No. 2 smartphone brand, saying it will launch entry-level 4G phones over the next few months. "Last year this time, cheapest 4G smartphone was available for $120 (Rs 8,000), within a year it's down to around $55 (Rs 3,650)," said Tarun Pathak, senior analyst at Counterpoint "Prices can drop to $40 (Rs 2,700) by end of 2016."

The sharp drop in prices is being driven by two factors. First, the prospects of intense competition among operators is prompting handset makers to drop prices to make the most of anticipated demand.

Second, wider adoption of 4G technology and devices in China, Taiwan, Korea, Japan, and other markets offer massive scale for chip manufacturers to produce components at much lower costs, thereby driving down production costs of the handsets.

"What we saw happening in 3G, devices will also happen in 4G, but at faster scale," Shubhajit Sen, chief marketing officer at Micromax,. Micromax entry level phones begin from Rs 3,500 for 3G smartphones.

Samsung is the market leader in India's 4G smartphone segment, followed by Lenovo, Xiaomi, Micromax and Apple in that order. While the initial thought was to flood the market with 4G phones at under Rs 3,000 levels by subsidising the devices, sources say there appears no need to do that now, given the sharp price drops already being witnessed. Source: Economic Times

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