Android, Price Wars And The Race To The Bottom

Apple sketched the future of smartphones in 2007 with the iPhone. But they did best for the US market. As device & services converge, Android has stolen the canvas and taken it global. Today, it makes far more sense to hold an Android in India than iPhone. You get a working maps with traffic details, apps that you want, mostly free apps (so what if they are ad supported), customizations and overall a variety in terms of hardware and price that Apple would never offer.

Moto E

Tim Cook may call a Motorola E a non smartphone, but fact remains that for my mom a smartphone is something that does WhatsApp for her. For my operations executives at PriceBaba, it is something that can do basic maps, camera, browser and of course Facebook + Whatsapp. Moto E works well for these, and it costs Rs 7000 vs Rs 28500 a 8GB iPhone 5c would cost. If you want a little more power than that, the Moto G comes into play. No wonder Flipkart has sold a million Motorola phones in India, that too by only selling them online. 

Motorola has made fine products, I love some bits of the Moto X. But IMO what has worked best for Motorola is the price range that its phones have. The offers on Moto G and E brought down Flipkart multiple times. I remember lining up (logging in) myself to get a Moto E the night it launched. For Flipkart, even if the phones were sold at a low profit or no-profit or even a marginal loss, it doesn’t matter if even half of these million mobile phone shoppers are first time users. These phones were available nowhere else in India and Flipkart got great mileage from the exclusivity.

The race has begun, Xiaomi is going with Flipkart to launch the Mi3 at a steal of Rs 14,999. Asus has its new Zenphone lineup (again on FK) starting at Rs 5,999. And this is even before Android One initiative comes to life. Hardware companies have realised that a slightly cheaper phone with good specs would get adoption. It worked well to begin with, but if EVERYONE does it, who wins? Mr Evans has a great observation on the Android ecosystem here. This may well be the opportunity for Nokia + Microsoft to differentiate and take a meaningful marketshare from Android.

Recommended read by Seth Godin (The Race To Bottom): The problem with trying to offer products at the lowest cost is that you may end up winning.

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