Panasonic Pins Hopes on Smartphones in India

Panasonic plans to launch nine smartphones priced between 6,990 rupees ($127) and 35,990 rupees over the next three months in India, Manish Sharma, managing director at Panasonic’s Indian unit, told The Wall Street Journal in an interview Thursday.
To extend its reach, the Japanese company, known for its high-definition televisions and camcorders but a minor player in the smartphone market, signed an agreement with a local firm, Jaina Mobile India Pvt. Ltd., to help with distribution, marketing and customer service of its products.
Jaina Mobile, once a large distributor for phones made by rivals Samsung Electronics Co., 005930.SE +0.53% HTC Corp. and Apple Inc., AAPL +1.32% launched its own brand of cellular handsets – Karbonn Mobiles—in 2009 together with Bangalore-based UTL Group.
Mr. Sharma said he sees an opportunity in the Indian market and hopes to sell products with better features at an affordable cost to the Indian consumer.
Panasonic’s success in India isn’t assured, analysts said.
India’s smartphone market, “may not have the capacity to take more and more new entrants,” Faisal Kawoosa, a telecom analyst at the research unit of Cyber Media India Ltd., said.
Panasonic in November pulled out of Europe, the only overseas market for its Eluga smartphone handset, as part of its plans to withdraw from foreign markets and discontinue businesses that aren’t delivering. The company’s decision followed Panasonic’s move to streamline its unprofitable operations and focus more on competitive businesses such as selling home appliances, as well as rechargeable batteries for electric and hybrid cars.
India’s smartphone market is hypercompetitive with Apple Inc. and Samsung Electronics Co. taking a lion’s share of the sales. There is also stiff competition from Chinese manufacturers and low-cost Indian phone makers such as Micromax Informatics Ltd. in the South Asian nation.
According to data from technology research firm IDC, mobile handset sales in India during 2012 grew 16% from a year earlier to 218 million units, while sales of smartphones surged 48% to 16.3 million units.
In the last quarter of 2012, Samsung led the pack with a 33% market share, followed by local company Micromax Informatics with 13%.
Still, Panasonic is hopeful of its smartphones making a dent in the Indian market, and is confident of gaining at least an 8% market share by selling about 2 million phones between now and March 2014, Mr. Sharma said. That would help the company gain revenue of about 10 billion rupees, he said.
Panasonic India expects about 40% of its total sales to be driven by smartphones by March 2016. By that time, Panasonic’s sales from all businesses including consumer electronics, appliances and energy-related products will likely triple to about $3.6 billion, Mr. Sharma said.
In India, demand for smartphones is growing at a rapid pace spurred by the introduction of high-speed Internet and communications networks. Telecom operators are bullish on Internet services because they offer higher margins compared with voice telephone services where competition is intense and prices are low.
As a first step, Panasonic on Thursday unveiled a dual SIM 5-inch smartphone powered by MediaTek Inc.’s 2454.TW +1.34% chipset and Google Inc.’s GOOG -1.33% Android Jelly Bean software. The Panasonic P51 handset will be priced at 26,990 rupees ($492) and will be available in stores from next week, Mr. Sharma said.
The phone comes with an 8-megapixel camera, weighs 135 grams and has a built-in memory of 4 gigabytes, which can be extended up to 32 gigabytes.
Panasonic will sell the new smartphone at its own outlets across the country and is also exploring the possibility of setting up about 100 exclusive outlets in the next three months, Pardeep Jain, managing director of Jaina Mobiles said