South Korean technology giant Samsung is reportedly planning to exit the feature phone market in India, which is low in price but high in volume. The company is planning to manufacture the last set of feature phones in the country with its contract manufacturing partner Dixon by this December. According to an ET report, Samsung wants to keep its focus on devices which cost Rs 15,000 and more. The company could be doing so in line with meeting its Production Linked Incentive (PLI) scheme targets. Companies which manufacture handsets worth Rs 15,000 crore and more in factory price will only get benefits from the PLI scheme. In addition to this, the average selling price of smartphones in India is increasing and is currently in the Rs 10,000 – Rs 20,000 segment. Thus, the move from Samsung makes sense.
Samsung Has Already Spoken to Channel Partners About the Exit
As per the publication’s report, Samsung has already spoken to its channel partners and notified them about exiting the feature phone market in the country by the year-end. Even the feature phone market is declining rapidly with newer age technologies coming at affordable rates to the market. Feature phone shipment fell by 39% YoY in the first quarter of 2022, said a Counterpoint Research report. Even the telecom operators are encouraging the users in India to shift to smartphones capable of 4G and 5G connectivity. There are feature phones which support 4G connectivity, but they are not capable of doing everything smartphones can. Jio had also launched an affordable 4G smartphone after launching two affordable feature phones. Users want a smartphone today more than ever, and this demand is only going to grow from here. Thus, investing in the feature phone market wouldn’t be a very lucrative long-term business for Samsung from here. Regardless, there are still hundreds of millions of 2G customers in the country who will continue to rely on feature phones in the coming years.
