From Disruption to a Standstill: Why Micromax Needs a Quick Reboot

Micromax started off its mobile phone journey in 2000, and by 2017, it had moved on to manufacturing TV sets, air conditioners and even laptops.

At one point, Micromax, with Hollywood star Hugh Jackman as its brand ambassador, was giving Samsung a run for its money in India with its popular Canvas series of smartphones. But since then, the Xiaomis and Lenovos have taken over the Rs 10,000 to 15,000 segment. Micromax has gone quiet over the past six months or so, with no major product announcement.

There has been a drastic management rejig at the company, and co-founder Rahul Sharma seems to have prioritised his venture, Yu Televentures.

Also Read: Micromax, Lava Bow Down to Xiaomi and Lenovo’s Rise in India

Micromax went on an exploratory path. (Photo: Reuters)

Tarun Pathak, Telecom Analyst, Counterpoint Research The lull at Micromax started in the second half of 2016, when Oppo and Vivo ramped up their presence in India, investing huge money in events like the IPL and the ICC World Cup. 

What Went Wrong?

Micromax carries its weight in the entry-level phone segment right now, where the Chinese counterparts are not engaged yet. But standing still hasn’t helped anyone before, and Micromax should know better.

Experts feel that Micromax’s reluctance to offer newer features like dual-camera and fingerprint scanner was their undoing. And ‘note bandi’ only meant they couldn’t offer new products during the 2016 festive season.

Honor 6X comes with dual cameras at the back. (Photo: The Quint)

Tarun Pathak, Telecom Analyst, Counterpoint Research Indian brands decided to wait out the Chinese rush, but with demonetisation kicking in, local brands were the worst hit. The six-month period, without any new product to show, was heavy on them.

Unlike Vivo and Oppo, Micromax has over 50 products in the portfolio, so its falling stock in the vendor market didn’t help its cause.

Micromax couldn’t refresh its entire portfolio. (Photo: Reuters)

Tarun Pathak, Telecom Analyst, Counterpoint Research From selling 3 million units in 2015, their sale numbers came down to 1 million by mid-2016. This is when Micromax lost its negotiating power with vendors. After all, vendors want products that sell more. 

Next big Move

Micromax is now back in the news, soon to launch its first smartphone with dual-camera. It remains to be seen if the company still holds its position among buyers.

But, interestingly, Pathak isn’t sure if a premium phone is what Micromax needs right now. He points to the feature phone market, powered with 4G VoLTE connectivity.

4G VoLTE is the future of telecom in India. (Photo: The Quint)

Tarun Pathak, Telecom Analyst, Counterpoint Research Instead of going for a mid-range or premium phone, Micromax should target the entry-level segment where the Chinese brands are yet to invest in. 

Reports indicate that Micromax is working on a slew of feature phones that will be launched in April 2017.

Feature phones are back for mobile brands in India, especially now that they support 4G VoLTE connectivity.

Telecom experts confirm this change in consumer dynamics.

Tarun Pathak, Telecom Analyst, Counterpoint Research Early adapters jumped to smartphones very fast, but laggards didn’t find it compelling enough to make the jump. Which is why feature phones are back in demand. 

They also feel these 4G VoLTE feature phones will turn out to be better than the existing range of entry-level 2G phones.

Getting it Right, Now

Having said that, consumers may want to give Micromax a chance to redeem its lost position. The mobile market is notoriously fickle. Micromax needs to be smart and pro-active. Pathak feels they should continue investing in startups like HealthymeFy, and get better with its product decision making.

Tarun Pathak, Telecom Analyst, Counterpoint Research Investing in startups has helped them, and they should continue to find more opportunities to do so. 

Micromax should go easy on its ambitions, and start from scratch, according to experts. (Photo: iStock)

What they shouldn’t do is get into more product segments. Diversification is not sustainable in the long term.

Tarun Pathak, Telecom Analyst, Counterpoint Research They need to start from scratch, work like a startup. Rethink on its product strategy, go easy on the volumes, and focus on quality and not quantity for now.

It’s now up to Micromax to figure out if they are in for the long term, or they prefer blowing hot and cold every now then.

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