Re-writing the rules of the game - making low cost handsets exclusive

The paradigm of 'low cost' smartphones is quietly being re-written, with the recent online launches of the Moto E and Xiaomi M3 exclusively through Indian e-tailer Flipkart. Low cost handsets with decent specs have been around for sometime but have never enjoyed a great brand image or buzz. This is even truer of the many Chinese brands that have flooded the Indian market in the last two years. Many people on a low budget play safe and buy established brands like Samsung and Nokia.

Micromax broke the paradigm of cheap Indian phones when they launched the Canvas range in India - decently powered phones with a flagship that has always delivered specs equivalent to Rs.30,000+ handsets at sub Rs.20,000 prices. Combined with their foray into international markets, and their use of Hugh Jackman as brand ambassador, Micromax spiffed up their brand image and garnered serious interest from mid-range smartphone buyers. Earlier known for offering entry level handsets for the masses, it was a huge jump for Micromax to be even considered in the Rs. 10,000 + range.

Brand Motorola has been languishing since Google bought it out. With the launch of the Moto E and Moto G they came back with a bang. A recent article reported that Motorola sold 1 million handsets in India since their relaunch - even more impressive when you consider that the re-launch was done exclusively on Flipkart. Who thought that a low-cost product could be sold with such fanfare, exclusivity, pre-booking - all the trappings of premium and high end launches from Apple and Samsung. Yet, it totally worked. It's true that the handsets are fabulous value for money, but the retail strategy also helped to give the image of exclusivity.

And to prove that it was not a fluke, the same thing happened with Xiaom Mi3. The Mi3 is not just a great piece of hardware at an unbelievable cost (Rs.13,999). It also taps into the techie/geeky/ youth crowd by using a 'custom ROM' - an alternative flavor of Android developed and used by the enthusiast community who root and modify their phones. It is also a Flipkart exclusive in India, and to buy it, you have to register on Flipkart, and then hope you are lucky enough to garner one when the sale period opens for 24 hours. One round is over, and the Mi3 sold out in just 40 minutes. The second round will be on July 29th, so you should head to Flipkart now if you are keen to snag one.

And this new retail strategy is not unique to India. OnePlus, another Chinese company, has designed an incredible phone called One. The handset has specs equivalent to the Samsung Galaxy S5, and retails at sub Rs.20,000. OnePlus has also chosen to sell through an exclusive invite-only route, probably to save on margins that must be passed on to retailers. And the hype around the One has been quite incredible.

Will the trend last? We need to wait and watch? But for end consumers, its a sweet deal to get high powered handsets at a fraction of the cost of competition. And combined with exclusive retail strategies, it seems to be working well for companies too!