Samsung to discontinue low value feature phones business in India
By MYBRANDBOOK
Samsung is planning to exit the high volume but low value feature phone business in India gradually, with the last batch of the devices set to be manufactured by contract manufacturing partner Dixon by year-end.
The company is believed to be focusing its energies on higher price tiers, with launching smartphones mostly above Rs 15,000 going forward. Samsung's possible exit will leave the market open for its rivals in the feature phone segment, like Lava, HMD Global's Nokia and Transsion Holding's Itel sub-brand.
The move comes with the Korean company, among the two major multinational contributors to the government’s production-linked incentive (PLI) scheme, mandated to get sops only on producing handsets worth over Rs 15,000 factory price and, as average selling prices in India rise with the Rs 10,000-20,000 price segment seeing the most traction by volume.
The company is expecting to grow in double digits in the June quarter. It had already captured pole position in March, cornering a 22% share, driven by 5G handsets above Rs 15,000, and displacing Chinese rival Xiaomi in the process. The company has also been the highest selling 5G smartphone brand in India for two consecutive quarters.
Analysts say the government's PLI scheme for local manufacturing of handsets has had a part to play in Samsung’s plans. Under the scheme, multinational brands are mandated to manufacture phones above Rs 15,000 (factory price) to avail the benefits, while domestic brands can avail incentives by making cheaper phones.
As a result, Samsung had given its budget phone manufacturing business to local manufacturer Dixon. With demand for feature phones at an all-time low, it makes sense for Samsung to stop selling its feature phones in India, and focus more on exports.
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