RIP 2G! Samsung, Micromax, Intex To Exit 2G Handset Market As Demand Shifts To 3G and 4G
During the July-September quarter of 2014, sales of 2G phones accounted for 25% of the overall smartphone market in India. However, in 2015, the same quarter witnessed just 9% of smartphones sale. Right now, 2G niche has been reduced to paltry 5%, which may be reduced even further by the time 2015 ends.
Such dismal demand and sales of 2G handsets has prompted leading smartphone manufacturers like Samsung, Micromax and Intex to completely stop production of 2G handsets. With the industry excited for 4G launch by Reliance Jio, Airtel and Vodafone, the entire focus on handset sellers is now on 4G and 3G.
Considering that 4G enabled handsets will anyways support 2G feature, there is actually no point in selling 2G only handsets. This also means that 2G devices are encountering extinction from the market.
Smartphone Manufacturers Shift Their Priorities
Executives from some of the biggest retail chains have informed TOI that leading smartphone manufacturers have clearly discouraging 2G sales, as no new models would be launched henceforth.
Samsung alone has launched 14 4G enabled models this year, out of their total portfolio of 25 models, and the number may come down even further.
Micromax has admitted that 30% of their current sales are coming from 4G niche, and this is the reason they have launched 14 4G enabled models this year, which will go upto 20 in 2016.
Counterpoint Research senior telecom analyst Tarun Pathak said, “2G smartphones are no longer a viable business proposition and we expect all brands will exit the segment in couple of quarters,”
As price difference between 2G and 3G is coming to an all time low, phone manufacturers are now solely focusing on 4G handsets, as the demand is surging on this front.
As per Sanjay Kumar Kalirona, mobile business head of Intex, the next threshold for 4G devices is Rs 4000, while 3G only handsets would be sold for as low as Rs 2000. This leaves very little room for 2G only handsets, as the cheapest 2G smartphone launched this year was priced Rs 1750, while cheapest 3G smartphone was launched at Rs 1950.
Data Usage of 3G Rises
As per Nokia’s MBiT Index, which tracks broadband usage patterns in India, there is a steady rise in 3G consumption, and a steep decline in 2G usage, which has actually prompted handset makers to go for 4G or 3G only handsets.
In fact, September 2014 was the point when 3G usage overtook 2G usage in India, and the trend has continued since then.
As per their last report, 52% of data consumption in India during the month of December, 2014 happened on 3G, compared to 42% in January, 2014. Nokia MBiT report predicts that in December, 2015, 62% of overall data usage in India will happen on 3G network
This surge in 3G usage is basically driven by urban users, which has witnessed growth of more than 100% year on year till January 2015.
But fact also remains that 65% of all smartphone users in India face network issues, and surprisingly, 48% can’t even differentiate between 3G and 2G!
It will all depend on the infrastructure support provided by telecom companies to encourage usage of 3G and 4G services for the 651 million smartphone users, which India will get by 2017.
But as of now, its farewell time for 2G only handsets in India.