How much difference can Rs 250 make?

In a price-sensitive market, a difference of a couple of hundred rupees can result in a significant drop in market share. A study of the market shares of the top 20 mobile phone models in the country reveals that a price increase of about Rs 250-300 could result in market shares dropping by more than half.

For instance, the largest selling model, priced at about Rs 3,000, enjoys a 25% market share, while the second largest selling model, which costs about Rs 250 more, has a market share of less than 12%. Again, when it comes to colour phones, the difference in the market share of the highest selling and the second highest selling models is twice as much.

“At the entry level, the buyers are very price conscious. Even minor price differentials affect their purchases,” said an industry source.

Although 13 colour models feature among the top 20 models, the total market share of the colour models is about 28%. The seven monochrome models, with prices ranging from Rs 2,400 to Rs 3,700, have a total market share of about 54%. Of this, three phones (Rs 3,000-3,700) account for 46% of market share, according to a study by ORG-GFK. These figures are for March ’05.

There is a marked difference in the market shares of the top three models, although the price difference between these are only about Rs 250-400. The largest selling handset is the Nokia 1100, priced at about Rs 3,047. It has a market share of about 25% in terms of volumes, and 16% in terms of value.

The market share of the second highest selling model, the Nokia 1108, priced at Rs 3,301, fell by more than half to 12% (volume) and 8% (value). The third largest selling handset, the Nokia 2300, priced at Rs 3,698, had market shares of 9% (volume) and 6.8% (value).

The fourth and the fifth largest selling models are colour handsets that together have a 10% market share in terms of both volumes and value. The highest selling colour model is the Nokia 2600, priced at Rs 4,685, with a 7% market share. The Nokia 3120 model, priced at Rs 5,365, has a 3% market share. Taking the colour segment alone, these two phones have 17.6% and 7% market shares, respectively.

The Rs 13,890 Nokia 6600 colour handset is the only model that features among the top 10, with a market share of 2.3%. Motorola’s C 115 (Rs 2438 - ranked seventh) and Sony Ericsson’s J 200 I, priced at Rs 5,116, were the only two models to break Nokia’s hegemony in the top 10 selling models.

Nokia accounted for 12 of the top 20 models, followed by Samsung and Sony Ericsson — with three models each — while Motorola and LG had one each.