Philips reworks India strategy for mobile phone market

Lured by the booming mobile phone market in the country, Philips is staging a comeback in the mobile handset segment. It has launched three new handsets to mark the occasion: the Az@lis, Xenium 9@9 WAP phones, and the Savvy Vogue GSM dualband phone. Ranging between Rs 7,000 - Rs 19,000, the phones are targeted at specific target segments that include the family-oriented man, youth and tech-savvy users. 

The USP of the phones will be to push the simplicity of use feature of the handsets. Subash Chandra promoted Agrani Convergence will be the sole distributor of the Philips phones.

As part of its comeback strategy, Philips has appointed Bob McDougall as the new GM for the its communication products. He has 12 years of experience in telecom in Asian and Australian market. 

Philips had introduced its mobile phones in the Indian market in 1996 but had become largely inactive during the last two years. The cellular industry had been more or less stagnant till 1999, when the boom happened towards the end of 1999. After a year of studied observation, the company timed its entry to coincide with the boom in the industry. 

The Indian cellular market, which has been experiencing a CAGR of 39 percent and is expected to see a penetration of .45 during 2001 from the current penetration of .30. The rate of penetration has been compelling enough to lure the company to do a second launch of its handsets. During the period, January to August 2000, the cellular subscriber base increased by 1,60,000 per month. During the current year, two and a half million cellular handsets are expected to be sold in the Indian market and Philips is targeting a marketshare of eight percent of that figure. 

Another reason is the imminent entry of BSNL and MTNL as the third cellular service provider that is going to push the growth. The government is also in the process of allocating the fourth cellular provider, all of which will propel the growth of the subscriber base in the country. 

Says Bob Pillay, GM, Philips Consumer Communications in South/ South East Asia and Taiwan, "With the steady growth of telecom market in the country, we will do all we can to extend our influence into the mobile phone business."

The Philips distributor, Agrani will deploy a combination of retailing and bundling schemes with cellular service providers to take the products to the consumers. Emphasizing that reach will play a critical factor in gaining marketshare, Agrani will set up 150 retail stores across the country during this year and take the number of retail outlets to 2,600 by 2006.