Moneycontrol Bureau
Micromax, India’s second-largest phonemaker behind Samsung, is set to start a second innings with the launch of Yu, a subsidiary that aims to sell feature-rich smartphones at cost-effective prices, similar to how China’s Xiaomi – now the world’s third-largest smartphonemaker – has done.
The Yu range of smartphones, whose maiden model Yureka goes on sale online today, is expected to do things differently from its parent company: by adopting an online-only sales strategy (which helps to control costs) and providing the best possible specifications at a given price.
But in a direction China’s Xiaomi has taken to become a USD 45-billion company, Micromax is moving away from the commoditized business model that has worked well with a lot of players in both India and China (including Micromax itself), where phonemakers could stamp together competitive hardware in the most cost-effective manner -- possibly by outsourcing manufacturing -- and selling them at the lowest possible price, playing the classic volumes game.
Micromax’s new strategy is software and services -- even as the focus on class-leading hardware specifications is intact – and with it, the company aims to differentiate itself from others, by offering customized versions of Android operating systems or, as Yu is aiming to attempt, creating an on-site-pick-up service network.
Yu has tied up with Amazon India to sell its Yureka smartphone (registrations closed on December 24) online and given its powerful specifications – dual SIM with 4G capabilities, a 5.5-inch HD display, 1.5 Ghz octa-core Snapdragon processor, 2 GB RAM, Cyanogen OS, 13 MP f2.2 camera, 16GB storage and 2500 mAh battery – and Rs 9,000 price tag, a sellout within seconds is a given (considering that the phone received 3 lakh registrations while 10,000 units will be put up for sale).
Such a strategy will provide Yu with plenty of word-of-mouth and social-media push, cutting the need to indulge in flashy advertising campaigns.
In an interview with Tech2, Yu co-founder Rahul Sharma also said the company will not limit itself to premium smartphones, implying a foray into LED TVs or wearable devices may be in the offing too – again similar to what Xiaomi has done.
However, even if Yureka proves to be a knockout success, which it likely will, it cannot rest easy on its laurels. Xiaomi, whose Redmi Note 4G Yureka is directly taking aim, is planning to bring its other hotsellers to India, including Redmi 2 and the MI4.
But by conducting the Yureka flash sale on Amazon at exactly the same time (Tuesday, 2 PM) Xiaomi hosts its Redmi Note flash sale on Flipkart, Yu is taking the battle right to Xiaomi’s gate. Head-to-head, the Yureka edges the Redmi Note slightly on the spec-sheet.
Others, such as Lenovo, too are getting into the game.
All this means that the battle of sorts that is taking place in the budget smartphone market will also keep the global big boys Apple and Samsung on their feet and compel them to continue to innovate further – failure to do which has driven many a great tech company into oblivion.
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