Samsung overtaken by Micromax's 21-language phone in India

[MUMBAI] Samsung Electronics Co surrendered the top spot in India's burgeoning smartphone market to low-cost devices from Micromax Informatics Ltd that offer 21 local languages.

Micromax accounted for 22 per cent of smartphones shipped in the final quarter of last year, compared with Samsung's 20 per cent, according to researcher Canalys. In the previous quarter, the New Delhi-based company claimed 21 per cent of the local market, while South Korea's Samsung had 22 per cent.

Closely held Micromax gained by attracting first-time buyers in a country where most carriers don't subsidize devices and more than a fifth of smartphones sell for less than US$100. Samsung, which was also outsold in China by Apple Inc in the December quarter, released a US$92 smartphone in India last month in bid to fend off Micromax and China's Xiaomi Corp.

"Catering to local market preferences will become increasingly important," Canalys analyst Rushabh Doshi said in a statement Tuesday.

"Micromax has been quicker than its competitors to improve the appeal of devices."

In the second quarter of last year, Micromax also unseated Samsung in overall mobile phone sales.

Samsung cited competing research showing it had 34 per cent of India's smartphone market during the quarter. The company declined to release the full report, saying the data was proprietary.

"In the entire year 2014, we continued to lead the market with innovative and exciting offerings," Asim Warsi, a vice president for marketing of Samsung's mobile business in India, said in an e-mailed statement.

Samsung fell 0.5 per cent to 1,359,000 won in Seoul trading on Wednesday. The shares have risen 2.4 per cent this year.

India's smartphone market - the world's third largest - grew 90 per cent year on year to 21.6 million last quarter, according to Canalys. Vendors are flooding into the country with low-cost models as growth slows elsewhere in the world.

One of Micromax's best-selling devices, the Unite 2, comes preloaded with English and 20 Indian languages and sells for 6,394 rupees (US$103) on Flipkart.com.

Samsung's new Z1 runs on its own homegrown Tizen software rather than Google Inc.'s Android operating system and retails for 5,700 rupees. The Z1 comes loaded with 14 Indian languages.

After Micromax and Samsung, the next top phone vendors in India were New Delhi-based Karbonn Mobiles Private Ltd and Lava International Ltd, according to Canalys.

Xiaomi, which counts India as its largest market outside of China, ranked sixth, with less than 4 per cent of the market, Canalys analyst Jessica Kwee said. The company brought its feature-rich low-cost smartphones to India in July and had sold one million phones as of December, it said.

Xiaomi plans to start its own research-and-development center in Bengaluru, the city formerly known as Bangalore, to customize software for Indian consumers. The company will sell in the country from its own website by the end of this year, it said Jan 28.

BLOOMBERG