IPL LIVE STREAMING & HOTSTAR

Being an avid cricket fan, I was not at all happy when IPL live streaming was disrupted with a Hotstar's "To continue Please SUBSCRIBE" kind of popup message on my laptop screen. I was surprised for a while since i could watch it for free on Hotstar app in my phone, most probably due to Jio subscription. I wondered what if Hotstar allows free live streaming of IPL matches on it's app for all smartphone users, keeping live streaming from laptop reserved for subscribed users. 

How can Hotstar benefit from such a discrimination?

Hotstar's subscription plans are just like that of any other media streaming service i.e. subscribe for ad free experience and exclusive content... and just like others, it makes money out of subscriptions and ads displayed on it's platform.

With ads rates being quite high due to viewership reaching as high as 10 million during some moments of an IPL match, Hotstar can go for all ad based revenue model on all devices for IPL live streaming. But the fact that they have subscription plan for ad free experience reveals the insight that subscription from an individual pays them more than ads being directed at him/her.

Well then they can have only subscription based option for IPL live streaming. This is also not an viable option for a country like India where only small proportion  of interested population is actually capable to pay for such plans. Intense competition in Indian smartphone market to capture larger market share has led to players getting involved in price wars. The 4G revolution in India by Reliance Jio's entry has led to India having cheapest 4G plans in the world. These two simultaneous events in last two 2 years, have led to huge population from tier-3 cities, tier-4 towns and villages to get online and enjoy live streaming for the very first time. If Hotstar opts for only subscription based model for IPL live streaming, they will miss out on ad revenue from this new audience.

The right option is to have both streams open as source of revenue i.e. getting people who are capable to subscribe and by directing ads on who are aren't.

By denying interested people to live stream IPL matches for free on big screens, they are either getting them to watch on smartphones or getting them to subscribe. But why big screens like P.C., laptops and T.V.s ?

The motive behind such a discrimination should be that with such a practise, Hotstar will be able to successfully segment it's market/user-base based on spending capabilities without actually knowing their viewer's income/wealth status and thus will be able to get people who are essentially capable, to pay for their services. 

Generally, laptop users are college students and working class professionals from tier-1 and tier-2 cities of India. These users also constitute a major portion of Indian youth population. It is proven that young population exhibit higher propensity to spend money on subscription based services and since these people reside in top tier cities, they also posses high spending capacity.

Moreover, If a person is live streaming on laptop or T.V., then there is a very high probability that person has subscribed to some broadband plan. This broadband plan subscription is enough to justify for his/her high-spending capability and very much increases chances of that person getting subscribed to one of the plans. This is how Hotstar will be able to segregate their users based on spending capability.

FEATURE PHONES : STILL ALIVE, BUT WHY ?

Nokia Banana phone
 Source : theverge

First of all, let's get some recent fact and figures out of the way...

According to Counterpoint Research, global feature phone shipments increased 3% annually reaching 112 million units in Q-3 of 2018. Global feature phone shipment grew consecutively for four quarters from Q-4 2017 to Q-3 2018 whereas smartphone market experienced a small decline in global shipments during the same period. 

Here is a graph depicting the contrast in shipments between smartphones and feature phone markets.

Image source: counterpointresearch

Where does sale of feature phone comes from?

Around 90% of feature phone market is in Asia and Africa. More specifically, Middle East and Africa (MEA) and India account for more than 70% of feature phone global sales. 

Reliance Jio created disruption in feature phone market with introduction of Jio Phone and Jio Phone 2, which drove global sales of feature phones in Q-1 and Q-2 of 2018. In Q-3 2018, Jio phone sales slowed down in India after the initial hype surrounding Jio phone of effectively free price tag. MEA emerged out to be the largest feature phone market owing to shipments growth rate of 32%.

Still wondering...How and why feature phones make a sizable and relevant market?

Affordability

There are still millions of low-income people in developing nations with basic phones. An upgrade from a basic phones to feature phone puts much smaller burden in pockets of these consumers as compared to an upgrade from feature phone to smartphone. Due to high purchase cost of smartphones, feature phones dominate smartphones in poor developing parts of the world. 

Ease of Usability

The problem with majority of old people is that they are very slow and reluctant in learning new things. Features phones have limited options, thereby making it much easier to learn to operate as compared to a smartphone. When compared to smartphones, one of the most compelling attributes of feature phones which makes it the best option for needs of old age people is big battery life.

A longer battery life is also particularly useful for people living in developing countries where a large population has no proper access to electricity and people are often dependent on charging stations.

4G Revolution

Just like smartphones, features phones are also now available with option of 4G connectivity. These 4G enabled feature phones are a compelling upgrade option for already existing feature phone users because they act as affordable option for these these low-income consumers to experience internet for the very first time. Partnership of Kai Os with feature phone OEM's has also brought several useful apps on these 4G feature phones like Whatsapp, Facebook, Youtube and Google assistant, which were smartphone exclusive some years ago.

         

ONEPLUS : PRICING IS THE KEY ???

What does the trend in prices of Flagship Smartphones reveal ?

The graph below clearly depicts rising flagship smartphone prices. 

** base variant price

With Apple's latest iPhone X price touching the ceiling of $1000 price-point, an ultra-premium category of smartphone has emerged and industry in general is expected to experience a further rise in flagship smartphone prices. 

Apple did pave way for more expensive flagships but seriously an average non- geek person never need to spend that much. Budget smartphones are not only getting better but also cheaper over last 2-3 years. The surprising fact is that the rise in performance of these budget phones is such that they are almost equivalent to 2 year old flagships. They still lag behind to one of flagships phone major selling point i.e. camera quality. Budget phones in the range of $200 to $300 are most value for money option in the market.  

Similar Trends in Oneplus smartphone prices

*prices of all models are of base variant Back in 2014, Oneplus originally started as real flagship killer with their Oneplus One. It became famous for providing flagship grade specs with just nearly half the price. It was able to capture everyone's attention to due to highly aggressive pricing. As confirmed by above graph, there has been significant increase in launch price of base variant with every new model released from then onward.  This clearly reveals company's change in strategy from selling super value for money smartphones to entering into semi-premium pricing segment. Here is a comprehensive explanation which should explain a higher price tag by OnePlus. 1. Global Average Smartphone Price Source:Gfk One the most probable reason to start charging premium in prices might be with the case that the average selling price has been rising from last two years. According to market research firm Gfk, the average smartphone price saw a record high 10 percent rise in Q4 of 2017 making global average selling price to $363. Smartphone is single piece of tech that is used extensively by people of all ages. Keeping usage scenario and average use-cycle of around 2 years in mind, people might look to spend a good amount of their income on purchase of a smartphone. The increased purchasing power of consumers also must have played a role in increasing prices. 2.  Fierce Competition in Budget Segment Budget segment of smartphone market is targeted by smartphone selling companies in any market, especially in highly price sensitive developing markets like that of India and China. In these countries, Chinese smartphone manufacturers are flooding the market with new smartphone launches every other week. There is a price war among these players to provide better specs than competition at even lower prices. This was not seen earlier as most of buyers knew not much about specs but thanks to media sources like YouTube and various tech websites, smartphone sellers are now targeting consumers with better specification as selling point.   It might be the case that phone launched by a company in this price segment of around 15 to 20K is not a good sell just due to the fact that there are several other choices with consumer in this segment. This might have backed Oneplus to go with semi-premium strategy. 3.  Spending on Advertisement  It is no surprise to anyone that it is the consumer who ultimately bear the burden of spending on advertisement in form of higher price tags. Oneplus originally started as company which only let their product did the the taking to it's audience. But soon after few years, it started it's advertisement campaign. It's major focus is on social media platforms like Twitter and YouTube. Oneplus strategy is to be as interactive with audience as possible and knowing their view-point and ideas. Oneplus also aims to reach a larger audience. Owing to risk averse nature of previous generation, people ready to spend more than Rupees 35K usually look at any well known brand like Samsung because they don't want to take chance with lesser known ones like Oneplus. Having a TV campaign rolled out with their brand ambassador Mr. Amitabh Bachchan, will help build trust in consumers with old mindset. Recent Scenario (Launch of Oneplus 6)  As expected, Oneplus 6 was launched with even a higher price point than it's predecessor. The problem is that from it's last two-three launches, increase in number of features by Oneplus is not able to fully justify price hike. On top of that, new phone launches every six month keeps viable consumers guessing of next launch. Oneplus is already dealing with small consumer base in markets like India. It is very hard to think that with price hikes and frequent launches, Oneplus would be able to keep adding to list of people they serve, keeping in mind that any existing customer in these markets do not upgrade their  smartphones that often. SWOT Analysis

SMARTPHONE INDUSTRY IN INDIA (2017)

AN INSIGHT INTO THE SMARTPHONE INDUSTRY IN INDIA

Analyzing the Present Smartphone Market Situation

Smartphone market in India is highly price sensitive due to a large diversity of income level people present in the country and more people entering the upper middle and middle class from low level. It is very important for any company to get it's pricing correct in a market where the average price of a mobile is just $100. 

Year 2016 was a fantastic year for smartphone industry in India witnessing highly aggressive pricing policy by companies and consumers enjoying best for every rupee they spent. 
In first quarter of 2016 Indian market surpassed America's smartphone market to become world's second largest smartphone market.
The smartphone shipment in 3rd quarter reached 32.3 million units, crossing 30 million mark for the first time. 

A interesting point here is growing dominance of 
Chinese OEMs since they are able to provide features comparatively at very low price level. A decent part of others in pie graph above is Xiaomi's share. Although Samsung remains at the top as always but it saw a decline in the market share due to these Chinese companies like Xiaomi, Oppo, Vivo. 
The boom in the demand in Q3 can be accounted to the festive season and various big discounts offered by amazon, flipkart and snapdeal.

What's the Big Deal?

Why are so many Smartphone Manufacturing Firms are eyeing India as their next Big Market?

Smartphone industry in India is booming these days and much of it is credited to increase in purchasing power of common man as well as highly aggressive pricing policy of products by many smartphone manufacturers.


India has the fastest-growing smartphone market in the world, accounting for 27.5 million devices sold in the second quarter of 2016, up 17 percent from the previous quarter, according to IDC. Mobile subscriptions are expected to hit 1.4 billion by 2021, according to the Ericsson Mobility Report, released in June 2016.

Since a large percentage of population in India is young, it has high demand for consumer goods like smartphones. This is what make companies to get attracted to India. Other smartphone markets like U.S. have saturated over time, but India still have large demand for smartphones.  

What changes has

MAKE IN INDIA initiative made?

Earlier companies used to import their smartphones from china and other nations to fulfill India’s ever increasing requirement. Even the domestic companies like Micromax, Karrbon, Lava, Intex were getting their phones assembled in China and then getting imported to India.

But now this scenario has changed. Indian based Smartphone manufacturing firms have setup their manufacturing units in the country and even some Chinese firms like Xiaomi, Gionee are assembling their handsets at Foxconn plant in Andhra Pradesh. As per industry sources, Chinese company LeEco will also start mobile manufacturing unit on 30^th August 2016.

In Q2 2016, Make in India initiative was the primary reason for the growth of budget smartphones. The count of brands manufacturing/assembling domestically jumped from 10 to 35. It contributed to almost 70% of the total smartphone production volume during the quarter. - dazeinfo.com

It was a huge quarter for Indian brands - their share of the smartphone market was at an all-time high of 45%, while 67% of all phones shipped were made in India, according to CyberMedia Research's India mobile handset 

Read more at:

http://bit.ly/2jpSDQP

The program MAKE IN INDIA not only reduces the production cost of handsets but also increases supply to increasing smartphone consumer base in India.

India has attracted investment from 37 mobile manufacturing companies in last one year that have generated 40,000 direct jobs and 1.25 lakh indirect employment.

OPPO is planning to invest 1.5 billion yuan ($ 215 million) to build an industrial park in India to bring down manufacturing cost, according to media reports earlier last month. The company already has a factory in Greater Noida. 

Read more at:
https://goo.gl/1bzJvC

In the last one year, 37 new mobile manufacturing units have come in India helping to achieve to become a big hub of electronics manufacturing.11 crore mobile phones have been made in the country in last one year compared to 6 Crore earlier.Government has provided Rs. 10,000 Crore under Electronics Development Fund to support new entrepreneurs in the field of electronics. 

The Electropreneur Park (EP), which was inaugurated in South Campus of Delhi University, is an incubation centre set up with government funds of around Rs. 21 Crore to support incubation of up to 50 companies.

Currently, India imports electronic goods of over Rs. 3 lakh crore. The setup of Electropreneur Park is a step in direction to reach goal of bringing imports to zero by 2020 by Government.