Why Smartphone Manufacturers Focus on Making Affordable Phones

If you are part of a smartphone brand, your first priority, before even launching a smartphone, would be to understand the smartphone market, do adequate research and analysis through focused consumer surveys, and find the consumer segment you would want to target. Every great brand has had its unique selling proposition; when Apple decided to launch its first mobile device over a decade ago, they knew they had to cater to the tech-savvy individuals — the niche segment that felt they weren’t being catered to by other brands.

This is why Apple, for over a decade, refused to move out of the premium segment. In the premium segment, only Samsung has given Apple a run for their money. Thus, smartphone brands need to understand the market’s needs and requirements, which is why the Indian smartphone market is currently inundated with smartphone brands offering budget-friendly smartphones.

That said, there are more reasons other than just the socio-economic factors. We highlight a few below.

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A significantly large portion of the Indian consumer base has always preferred budget phones over the more expensive ones. For instance, even before the Chinese brands entered the Indian market, a large portion of the market share was captured by brands like Samsung, Micromax, Karbonn and Intex. The three Indian smartphone manufacturers focused largely on the sub-5,000 INR segment, and most of their offerings were priced below Rs. 10,000.

With Chinese brands like Xiaomi, OPPO, Vivo and Realme entering the Indian market, the Indian consumers have since had a plethora of options to choose from. Consumers can now purchase feature-rich smartphones with excellent cameras at pocket-friendly prices. Some of the best phone under 10000 today include Realme Narzo 10A, Realme C3, and Redmi Note 7. These are awesome phones in this price segment that you can buy without giving a second thought about it.

  • India’s burgeoning middle-class

As per the latest reports, the Indian middle class currently constitutes around 300-350 million of the total population, with some estimating that it could even be half of the total population, and it is pegged to grow even more in the near future. That means there are inherently more people that can purchase a smartphone, if it is offered in the budget and mid-range segments.

According to another report last year, it is expected that 80 percent of the sales will soon be of smartphones costing more than Rs. 10,000, with the mid-range consumer segment accounting for around 51 percent of the smartphone sales. That is a good incentive for smartphone brands, as they can continue focusing on the budget and mid-range segments, which are currently dominated by Chinese brands along with Samsung.

  • Chinese brands setting the trend

As previously mentioned, the entry of Chinese brands in the Indian market — Xiaomi in particular, altered the landscape of the smartphone industry. Consumers who had to spend large amounts previously to purchase a decent smartphone could now buy Redmi phones for less than Rs. 10,000, which came with better cameras, faster processors and impressive features. 

This has resulted in other brands focusing more on their R&D, and finding innovative ways to pack in more features without hiking the prices. Today, we get smartphones with top-of-the-line features, stunning 64MP rear cameras and cameras with AI technology for less than Rs. 20,000. Upcoming mobile phones that support 5G network, such as the Redmi Note 10 Pro, will be made available to the Indian consumers for less than Rs. 20,000!

  • Less Tinkering

Finally, another reason why smartphone brands choose to make more affordable smartphones, is because they don’t have to tinker too much with the previous models. For instance, they can take the previous version of the smartphone, and upgrade it by either putting in a more recent processor, or just change the camera hardware or the sensor assembly.

Smartphone brands then just have to market it accordingly, with a good product marketing campaign, a good tagline that gets the consumers excited, and launch the new model with as much hype and pomp as possible.

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