Will Chip-Makers Bring Cheer to Domestic Handset Makers?

Article By : Sufia Tippu

A look at Unisoc, Mediatek and Qualcomm strategies going forward in India

BENGALURU — Five months ago, when Adam Peng, Unisoc CEO visited India he sounded quite optimistic about the India market. Like every other visiting CEO he was talking about the general market sentiment, engineering talent, and of course the burgeoning consumer market and how these factors would eventually impact fabless semiconductor companies like UniSoc.

Compared to Qualcomm or MediaTek this Chinese fabless company formerly known as Spreadtrum, is not a very well-known name in India though the company has been providing chips to a number of Indian manufacturers like Samsung and Reliance as well as a few local handset manufacturers. Moreover, there was an earlier Strategy Analytics report which stated Spreadtrum lost market share in 2017 because it didn’t accelerate its LTE product roadmap through innovation.

So, it did seem like a pep talk and the oft-heard chant of how the Indian mobile handset market is the fastest growing market in the world and is the next best place to expand.

But now, with Reliance Jio’s successful run rate of notching 250 million subscribers within two years and a Credit Suisse report which estimated that the total number of JioPhones sold so far could be close to around 40 million, Unisoc has every reason to be bullish about India.

The Credit Suisse survey on the Indian telecom sector said that as suggested by recent media reports, the JioPhone model had 36 per cent share of the feature phone market for January-March quarter of 2018 on an expanded market base. “This implies JioPhone sales would be around 21 million for the quarter or roughly 7 million per month,” the survey said.

The company has about 40% market share in the combined smartphone and feature phone markets and has been providing chips to number of handset manufacturers for the older variants of the Samsung Galaxy J series as well as Reliance feature phone models.

MediaTek, on the other hand, has been empowering domestic handset manufacturers such as Micromax, Intex, Karbonn, etc with its processors for a few years now and is well-entrenched in the market.

But for Qualcomm it has been a bumpy ride as far as domestic handset manufacturers were concerned. While India has been primarily a 2G and 2.5G and 3G market, Qualcomm couldn’t really fit in because it has been primarily a 4G company for the last 5-6 years. Now that India has shifted quite quickly to a 4G LTE environment, there are offerings that Qualcomm could bring to the table of domestic manufacturers and ensure that its growth trajectory remains positive.

Unfortunately, Indian handset vendors underestimated Chinese companies and lost a significant market share to players like Samsung, Xiaomi, Oppo and Vivo in the last few years due to lack of focus on R&D as well as poor marketing strategies – both offline and online.

In the present scenario, if the local manufacturers manage to pull their act together and get complete control over the entire value chain -, hardware, software and design – as well as not limit themselves to the Indian market alone, things could ease up for them instead of being flat.

Unisoc’s Sharma said the company is in talks with domestic manufacturers such as Micromax and Lava to help them make a comeback in the market, especially in the $100-price segment. “We are seeing how we can cooperate with them to help grow the market share,” Sharma said.

He added that these Indian brands are realigning their product strategy and Unisoc aims to play a key role with its new chipset, Unisoc 9863. “There will be new launches happening at very competitive prices. Several players are evaluating this. For India, mostly Indian vendors are evaluating the launch. Globally, Chinese players are involved,” he added.

Interestingly MediaTek and Qualcomm are also said to be working closely with Indian handset makers to help them make a comeback in the market where they have lost significant market share to Chinese brands like Xiaomi, Oppo and Vivo in last few years.

“There has been some correction for sure in the market. Some of them will come back, and they are already working in this direction, and we are closely working with them to make a comeback,” MediaTek India’s country head for corporate sales international, Kuldeep Malik said in a recent report.

Qualcomm too has not been complacent in being a leader with the global players. Reports say that it is also collaborating with domestic brands in a bid to help them find their niche in the extremely competitive smartphone market, which remained flat in the first quarter of this year, while the overall market grew 48% on yearly basis.

“You’re going to see us continue to enable local brands, to make them successful in their smartphone business,” Jim Cathey, SVP, and president, APAC & India, Qualcomm International, had recently said in another interview. He added that Qualcomm like the others was also working with some international brands in their entry into India.

Now, it remains to be seen whether the domestic handset makers would give the foreign companies a run for their money. Or only those manufacturers with extremely deep pockets will emerge as ultimate winners in a market as varied and fickle as India.

— Sufia Tippu is a freelance tech journalist based in India contributing to EE Times India

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