It was just a year ago when Indian smartphone manufacturer Micromax clinched the title on no. 1 smartphone selling brand in India from Samsung Electronics. But this success didn’t last long. The current condition of Micromax is very disappointing, many top executives of the company have resigned. Company’s shares have also been nearly halved. They also entered some new markets like Russia where they were doing great but the condition is not the same.
We all know that India is world’s fastest growing smartphone market in the world. The shipment volume of Indian smartphone has been moved by 29% to 103 million units last year. Many new brands have also entered the Indian market. We have seen many successful stories of Chinese brands selling millions of units in India. Few such companies are Xiaomi, Coolpad, Meizu, InFocus, LeEco,Qiku, Re-entry of Motorola. These companies provided phones with better specs and for a lower price than Micromax.
Now at this time, even Samsung is busy releasing more & more affordable phones in India such as the Galaxy J series, On series & their entry level Tizen Z1 phone.
Tarun Pathak, analyst at Counterpoint Research in New Delhi said something on this trend, “What the Indian brands did to the global brands two years ago, Chinese phone makers are doing the same to Indian brands now, and over the next year we see tremendous competition for Micromax and other Indian smartphone makers”
Micromax was founded back in 2000 but they started selling mobile phones in 2008. They partnered with Chinese manufacturers like Coolepad, Gionee & some others for smartphone manufacturing which was cheaper in China.2015 had a record for Micromax as they have launched more than 40 models in India.
There were also some speculations if Alibaba was ready to invest in Micromax or not. Co-founder of Micromax Mr. Vikas Jain said that Alibaba & Micromax have disagreed on a future road-map which clearly indicated that Alibaba is no more interested in investing n Micromax. Alibaba declined to comment on this.
Micromax wanted to have it’s own R&D facility in India where it would design smartphones that will not look cheap clones of Android handsets available out there. But lack of investment didn’t let it happen.
A former executive said,”We hired about 80-90 people in Bangalore to do in-house software and design, but with no money from the investors and little interest from the founders, that team fizzled away and that office has been partially shut down now”
Vikas Jain said,”Right now the whole industry is suffering because of the Chinese phones.We have seen large write-downs happening on inventory in China, and that inventory is being passed on to India at a markdown.”
In the final quarter of 2015, Micromax’s shipments fell by 12.1 percent, against growth of 15.4 percent for the sector, according to industry tracker IDC. Micromax’s share of the smartphone market fell to 13 percent in the fourth quarter from 22 percent at its peak in 2014, according to IDC.
The top executives of Micromax are resigning. As per records, a minimum of 4 top executives have resigned fro their post since November 2014. The latest on e is Mr. Vineet Taneja who worked as the CEO for Micromax.
Neil Mawston, director at a London-based research firm said, “Micromax needs to diversify geographically and also needs to diversify product lines“