Nokia And Reliance Pursue India’s Low-Income Consumer

May 7, 2007 – 5:54 am

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India is a huge country, and the bulk of the nation’s citizens are not wealthy. So if you want to sell a mobile phone to people and get everyone on board, it’s going to take pricing the units at levels people can afford. That’s why the recent slate of offerings from Nokia and Reliance aren’t likely to be the only ones coming.

Reliance came their cheapest mobile phones yet; handsets manufactured in China that will sell for between 777 rupees ($19) and 888 rupees ($21.74) for an initial period.

“The handsets … will extend the benefits of mobility to an entirely new segment of population in metros, small cities as well as the rural hinterland of India,” S.P. Sheila, president, Personal Business at Reliance Communications, told reporters in Mumbai.

Reliance is investing a staggering $2.5 billion US this year in developing out a nationwide calling network. They’re targeting any city with a population over 5,000.

Nokia, now has around 2/3rds of the Indian market, but the numbers are slowing down. The intoduction of the seven new phones may change that.

Nokia introduced new phones targeting first time-users that are priced between 2,240 rupees ($54.72) and 4,800 rupees ($117.27), excluding operator subsidies and taxes. The handsets, including the Barracuda and Finnish company’s cheapest model, the 1200, will hit shelves in the second and third quarters.

This is war! The two companies have targeted the market, set their prices, built their products, and now will find out what the customer really wants by getting out in the field and doing research and sales. Motorola and LG have been relatively quiet this week, but I expect big announcements from them soon, too.

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