Phone

With the emotional announcement of returning to the smartphone game, Micromax is responding to the 4-6% support which GOI promised to device manufacturers in India. Early reports suggest that the devices are in the range of ₹7k to ₹25k will be using MediaTek Helio chipsets. They intend to sell other smart devices as well (ACs, TV?)

Here is my unsolicited advice to Micromax.

Updates / Support

In the past you have rarely followed the 18-month OS / 24-months security update policy. Now that Samsung and Google have pledged 36-months OS updates, the stakes are higher. Spreading your product line thin and not keeping the devices up to date is leaving your customers high and dry.

I don’t mind if you charge users for OS updates, have the option to keep the popular devices updated (while making financial sense).

Exchange

The way to win the market share is to grow number of active devices, and ensure these customers buy their next device again from you. For this you need to offer longer/cheaper support and higher discounts for exchanging old Micromax devices for a new one. Even at launch, if someone exchanges a Micromax device (including non-functional ones), they should be given higher loyalty discount (it would also help you meet your device recycling numbers).

Accessories

The way to make profits is to sell premium accessories. Make/Enable great cases, quality cables, chargers, wired earphones (co-branded are good as well).

Catalogue / Calendar

There may be a good margin to earn in labelling other consumer durables under your brand. I would say that it dilutes the brand more than anything. Look at examples of Havells, erstwhile Videocon, and Urban Ladder etc. who have gone for volume in their catalogue than quality per se.

You don’t want to release devices every 4 months, rendering the previous model obsolete. In an ideal scenario older model at a lower purchase price should be competitive for 12-18 months window.

Sourcing

A majority of components going into the products will be sourced directly from Chinese vendors. You want to develop alternate vendors for these in the longer run. The key is not low cost, but best quality at scale. While it is tempting to source the best selling / lowest cost components, it is worth the effort to pick the most reliable and well supported ones.

Size

India had ~500 million smartphone users at end of 2019. ~77 per cent of Indians accessing wireless broadband through smartphones. Installed base - Samsung at 34%, Xiaomi at 20%, Vivo at 11%, and OPPO at 9%, respectively. Each % point is 5mn active devices, and installed base is expected to hit ~750mn devices by 2021.

Purchase

I have bought devices from Apple, Samsung, Xiaomi, LG and OP but never from Micromax. My reasons are following

1. Durability - device is not expected to last more than 12-18 months
2. Micromax will rarely, if ever update software
3. There are dozens of models (spray and pray), making it difficult to know which model is worth purchasing or the device which will have repair/software support for more than 12 month window.
4. Design

What would it take for me to recommend it to friends and family?

1. Quality - Should last for 24-36 months.
2. Local sourcing of parts, and transparency about the same
3. Go a-la-carte - Don’t include a charger (sell a competitive charger separately)
4. Keep it simple - Clear value proposition (ignore bells & whistles).
5. Product innovation
6. User and Tech Reviews

I know that for a majority of customers the choice primarily comes down to “PRICE” as compared to equivalent device from any other global company. It is a hyper competitive market, and the arena is crowded. Being the only credible local brand is your trump-card, and it will generate initial sales. Play it well.

Best, Umang