Lava sees silver lining in sub-10K smartphone segment

Homegrown mobile handset maker Lava International is keen to tap the "vacuum" in the sub-10K category, as most Chinese smartphone majors are moving above this price segment.

"The current Chinese handset majors, who had earlier disrupted the category with aggressive pricing, are now gradually turning to the over-Rs 10,000 smartphone segment. We want to tap this vacuum with under Rs 12,000 handsets," Lava International Group Product Manager Deepak Mahajan told PTI.

Lava claimed a marketshare of 12 percent and 4.5 percent in feature phones and smartphones, respectively.

The company had earlier announced plans to revive the brand in the smartphone segment, offering a two-year warranty and money-back guarantee to highlight product quality.

It used to sell about 2.5 million handsets per month a couple of years ago, which slipped to about 1.5 million devices now.

However, the company sees revival in the domestic market, following the consolidation phase in the industry.

"With government polices in the form of import duties on components pushing for make-in-India, handset makers will not be able to survive without high localisation. Major players are already making PCBs, including us, to stay competitive," Mahajan said.

Lava is evaluating setting up two major manufacturing hubs or industrial parks at Greater Noida and Haridwar that could entail investments of up to Rs 2,600 crore.

"We are negotiating with mobile component makers for having presence in these locations to create an eco-system," he said.

If these two projects get executed, then Lava's capacity could significantly rise from the existing three million per month.

The company is also bullish on exports as it enters deeper into Africa.

"We are selling in some 14-15 countries of Sarc, Middle East and Africa. Exports are about 40 percent of business. Foraying deeper in Africa, the share of exports would go up to 50 percent of total sales," Mahajan said.