On august 29, 2012, as jk shin, president of samsung Electronics, unveiled Galaxy Note 2, the second iteration of his company’s flagship ‘phablet’ smartphone series, in Berlin, a guerrilla shipment of 10,000 similar devices was selling big in stores across India. It had been brought in only a week ago.
Well, the devices were almost similar.
The Canvas A100 smartphones had 5-inch screens as against the 5.5-inch ones on the Note 2 but the resolution was not half as detailed; the batteries were two-thirds the capacity; the processors had just one core compared to the four on the Note 2; and RAM was just a fourth in comparison.
Then there was the price: Rs 9,999 compared to the Note 2’s Rs 39,900 at the time of its formal launch in India in November that year.
At 25 percent of the Note 2’s cost, the devices seemed to make sense to the Indian customer—so much so that in another three weeks, they would be all but sold out. This was the signal its makers, the Gurgaon-headquartered Micromax, had been hoping and waiting for.
Within days its supply chain, distribution and marketing machinery started shifting into attack mode. Specifications were mapped and orders sent out to China for a newer version featuring a dual-core processor, a better quality and higher resolution screen, more internal memory and an upgraded camera. The improved Canvas 2 was unveiled in the first week of November, a little over two months after its predecessor’s 10,000-unit test launch had proved successful: It still sported the Rs 9,999 price tag.
The phone turned out to be a winner for Micromax, selling out across many stores within days and commanding a premium over its retail price for nearly six months. Supply constraints certainly contributed to the instant sales (Micromax underestimated the popularity of the devices) but there was no doubt that the company was on to something significant.
“Our multinational competitors offered one or two smartphone models in every successive screen size—3.5 inch, 4.3 inch, 4.7 inch, 5 inch, etc. It was as though they were checking each [screen size] box with a few models,” says Rahul Sharma, 37, one of the four co-founders of the company and easily its most recognisable and dapper face.
So what did Sharma and Micromax do over the next year?
“From a Rs 6,000 Canvas Viva to a Rs 19,000 Canvas 4, we have put a 5-inch smartphone next to each of their boxes. We bet the house on 5-inch smartphones and that market just exploded!” he says.
Yesterday’s Scrappy Challenger Is All Grown Up
Micromax has come a distance since making its first mobile phones in 2008. According to research firms IDC and CyberMedia Research (CMR), the company is the third largest seller of mobile phones in India behind Samsung and Nokia.
The mobile phone market is currently going through a major upheaval as hundreds of millions of users in India and around the world upgrade from cheaper and less-capable feature phones to smartphones. In the smartphone race, both these research firms place Micromax firmly at the number two position behind Samsung in market share—22.7 percent versus Samsung’s 31.9 percent, according to CMR; and 22.2 percent versus 25.7 percent, according to IDC.
Samsung India declined to speak with Forbes India for this story. A spokesperson said the company did not believe the IDC and CMR figures were accurate; they were more convinced by the GfK-Nielsen numbers (a proprietary subscription service, the specifics of which Samsung did not disclose). “We do not consider Micromax a competitor,” the spokesperson added.
Sharma is amused when he hears that Samsung does not consider his company a competitor. “I think Mahatma Gandhi said it best: ‘First they ignore you, then they ridicule you, then they fight you, and then you win’!” he says.
And winning they are.
According to Sharma, Micromax has already surpassed last year’s revenue of Rs 3,100 crore in the first six months of this year. “We’re targeting one billion dollars by the end of 2013,” he says.
Vikas Jain, another co-founder, says, “In most countries where Samsung has a local subsidiary and has been in operation for over 12 months, they are usually number one. If we defeat them in India, this might become the first country where that stops being the rule.”
With its coffers filling up with revenues from the sale of over 2.5 million handsets each month, Micromax is setting its sights even higher. A stunning new global ad campaign featuring Australian actor Hugh Jackman was rolled out recently. The company claims it is spending Rs 30 crore on the campaign alone.
Gone is the diffidence and scrappiness of before. In its place is a belief that it can vault itself up the global pecking order of smartphones where the downslide of Nokia and RIM has left a vacuum. “Though it accounts for less than 10 percent of our revenue today, in three years we want our international revenue to be equal to our India revenue—or $2 billion each,” says Sharma. As with most Micromax senior executives, the line between confidence and bombast is blurred.
The Smartphone Rider
Running Android on lower-end phones appears to be a strategic priority for Google, given its work on the latest Kit Kat version to ensure it can run smoothly on phones with just 512 MB of RAM. “For 2014, our goal is [to figure out], how do we reach the next billion people?” Android head Sundar Pichai said at a company event on October 31 in San Francisco.
“Feature phones often require customisation, which becomes a hassle when they are being sold across multiple countries. We were prudent enough to pull back and consolidate,” says Mathur. “When I joined in January, we decided our gameplan would be to strengthen our presence within the SAARC countries. We could leverage our existing advertising because most [television] media plays there too.”
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(This story appears in the 29 November, 2013 issue of Forbes India. To visit our Archives, click here.)
The most useless mobile company On the planet.sheer waste of money.my phone broke down within 2 days and those useless so called micromax service center has not allowed my warranty claim. A really shitty company... The owners of micromax are fooling people. Buy micromax if u want the buttons of your phone in your hands in 2 days.on Jul 15, 2014
Really frustrated with the device. I own Micromax Bolt A62 a pathetic mobile phone. After buying: Within 15 Days Earphone stopped working. Within 25 days Loudspeaker stopped working. Within 2 months phone started hanging. Got my new Ear phone back after 2 months. And within 4 months phone stopped responding, Restarts automatically after every 5 minutes. As soon as I touch my data connection to turn it on it hangs and finally restarts and keeps on restarting. Presently my phone is in a Service center in Noida sector 18. Its been 10 days now still waiting. I appreciate Micromax management\'s hardwork to facilitate smartphones at a lower price. But there is no point of making a low cost smartphone that stays most of the time in an unresponsive Service Center than in a buyer\'s hand.on Jun 17, 2014
Dear Team Regret to inform you that I AM NOT SATISFIED WITH THE SERVICES OFFERED BY Micromax till date. I bought the mobile on 05.02.2014 and after 15 days of my purchase I had faced the problem of touch screen and the same has been resolved automatically in 2 days but thereafter again I had faced the same problem and then I visited your service centre for the same. The problem has been resolved by your team at that time but they took 15 days to resolve the issue. After 15 days when I got my mobile then after 1 hour only I had faced the problem again then your engineer repair the same immediately. Now again I am facing the same problem against which the mobile had already given to your engineer on 30.04.2014 but till date the problem has not been resolved and they had change two reference no. Earlier they allotted 1403144624 as ref. no. and then 3004141823 as ref. no. for same problem against which the mobile has been submitted to you on 30.04.2014. Could you guys please explain is this the way of handling customer queries. Either repair/replace my phone by 09.05.2014 or refund invoice price to me. Nitesh Kumar Rathor 9958313191on May 8, 2014
Hello, My Name Is Himanshu Shukla.And I am From Delhi,Sant Nagar. Sir Micromax is a good smartphone company. From 1979 too 2014 it was a quite great journey of Micromax. Thanks for a great article. It was incisive and provided a good purview of business competitiveness in the handset industry. It was also instrumental in shaping of ideas that can be ported to other business endeavors. And the CANVAS series of Micromax is the best... I love that..on Mar 22, 2014
hello, my name is ram,and i am from punjab,nangal township.Micromax is good smartphone maker company but, main problum is that, this company haveing no moor services senters, like my city, thats the resion in my areas not moor peoples are atracted for micromax mobiles, othervise its ok.on Mar 18, 2014
Big talk, poor show. It seems like management is not aware of ground reality. After sales service of Micromax is Pathetic. I have lost all the charm of owning this brand. I have submitted my phone at V-Serve service center in noida on 10/12/2013 and since then my phone is not returned back. I visited the center and escalated the issue but I am disappointed from every person to whom I tried to contact. After escalation, I received a call from Mr. Varun from Escalation Team and I was very much disappointed from his attitude and behavior. He was not ready to listen and was literally in altercation mode. I was really annoyed by the way he argument and gave baseless reasons for not repairing and returning the phone. I asked him to tell exactly who is actually accountable from Micromax side. Micromax says, go and talk to service center and service center doesn't listen. This is totally unprofessional. You do not value customer's time and money, no SLA or deadline for resolution of complaint. Service center even close previous jobsheets and open new jobsheets from their end to keep their records clean. This is the worst service experience I ever had in my life. God knows what you are going to do with Russians by opening shop in Russia. After so much of frustration, I have switched back to Nokia, a trusted Brand. I always used Nokia handsets since beginning and never bothered with service. That's what quality you pay for is.on Jan 23, 2014
Thanks for a great article. It was incisive and provided a good purview of business competitiveness in the handset industry. It was also instrumental in shaping of ideas that can be ported to other business endeavors.on Jan 6, 2014
always yessssssss because This manufacturer jumped in the budget mobile segment five years ago with a $30 made-in-China model and became the country's No. 2 smartphone brand. Now Micromax will begin selling phones in Russia next year in January, and then move onto Romania, see my artical at: http://www.themoneytimes.com/featured/20131213/indian-smartphone-brand-micromax-go-global-id-1701713749.htmlon Dec 13, 2013
Micromax is the worst mobile company in India,they are having worst service network,they have taken my phone for service 3 months back and still they have not got the spare and this is the same case everywhere. My sincere advise to all is don\'t even think of buying low quality,worst phones of micromax.on Dec 13, 2013
It\'s funny how my name is Arvind too..Well,I submitted my 25 days old Canvas Magnus A117 last thursday in Service Center ecause my Camera was gone(It was not focussing anymore,Hardware Problem)..While submitting it,I told them that I have factory reset the phone(Actually I didn\'t) and still the camera was not functioning..They said it would take 7-10 days..I got my phone today(With replaced Camera Lens).And guess what,They didn\'t format my phone at all..All my apps were still there..Thursday to Saturday(Sunday holiday) was all they took to repair my phone...This is the best ever service i\'ve come across..Infact,I remember myself when i gave my nokia 7610 phone 6 years ago to Nokia Care and got it after 1.5 months...Do not complain about the Company as a whole..The service center person would be the culprit..BTW,I\'m from Chennai!on Dec 16, 2013
Micromax service is very very very much poor than Samsung and Nokia...Once u put ur mob in micromax service centre you will get the same minimum after 1 month.I got after 3.5 months. Really third class service providing.on Dec 8, 2013
Micromax is basically a trading company. Questionable integrity of the top management. One of the founder spent few weeks in jail recently for bribing the New Delhi Municipal officials. Smart phone business is a different ball game. I do not think they have the technology to succeed there.on Dec 1, 2013
Micromax has a very wide and fine market in India. No one can decline it. Indian people want good smartphone and at low cost and they find Micromax which fulfills their want and obviously Samsung is the market leader but who says that will remain in the same position forever. They should know that once it was Nokia whom they replaced and if a company has good features and people has attraction towards it that it is natural they will gain the highest position,may be for a little while.on Nov 28, 2013
I feel Micromax has the entire world waiting for the brand and products and there is huge potential in many geographies. The markets like Eastern Europe, Central Asia, Sub- Saharan Africa, Central Africa, East Africa and Gulf are "low lying fruits" in this regard. It is the distribution which will matter in these geographies and branding would follow. In most of these geographies, India is already a known force with Tatas, L&Ton Nov 27, 2013
Our government has come up with a National Electronics Policy to give incentives for chip manufacturing etc among other things. Hope the policy will succeed. Although i feel that the policy is too little too late. Especially after India signed the Information Technology Agreement of WTO in 1997 to reduce import tariffs on electronic goods import to zero by 2005. But, as they say \'der aaye durust aaye\' Cheers!!on Nov 25, 2013
yes they win the number game .. but ... we totally overlook the fact that nothing is getting manufacture in india .... we have the low cost labour but lack manufacturing abilities ...on Nov 25, 2013
All the very best to Micromax for being the Zara of mobile phones. But brands like Zara and Mango are built not only on competitive products but also customer service. One genuine feedback to Micromax - please make your service centers a little more responsive. I had deposited my Funbook at your service center on October 1 and i\'m still waiting to get it. If Micromax cracks the customer service puzzle they will surely win in the national as well as the international markets. Cheers!!on Nov 25, 2013
Great story. Wonderful to see an Indian brand come such a long way against all the odds or no history of success in this industry by any Indian company. We should all support them, and take them to the top of any Korean or America brand. More power to them!on Nov 25, 2013
I agree, with u . But how ? I must want to tell u the founders my story. I purchased canvas 2 in June, 2013. Within a week, charger was not working. after a week another prob. I gave a device to service centre. after a month I received it. But within 2-3 days again a new prob. Now I got it after 2 months n with 2 new complaints. I m really concerned n want to know. Is it a path towards success ?.. In 8 months, my mobile is at ur service centre for 6 months. I want to tell u, it was my marriage anniversary\'s gift!!! :)on Mar 6, 2014
Hats of to young entrepreneurs.Long way to go Micromax. !!!!on Nov 25, 2013