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Spice Mobile plans low-end price war

Spice Mobiles is daring giants in the handset business, expecting to launch a price war at the low-end service in the hot mobile market, reports Ruchi Hajela.

india Updated: Jan 03, 2008 00:49 IST
Ruchi Hajela
Ruchi Hajela
Hindustan Times

Homegrown Spice Mobiles is daring giants in the handset business, expecting to launch a price war at the low-end and use savvy service bundling to displace all but Nokia in the hot mobile market.

It aims to have a 10 per cent market share in 2009, five times the current share and launch a handset costing less than Rs. 1,000 to take on big volumes at the entry level

Spice Mobiles, which so far focused largely on Tier II and Tier III cities is set to target big metros, particularly New Delhi and Mumbai, where the replacement market offers significant potential.

“The company is going to spend about Rs 20 crore to increase its visibility in these cities,” Kunal Ahooja, CEO, Spice Mobiles, told Hindustan Times. Spice Mobile aims to triple handset sales from the existing 1.5 lakh per month to 4.5 lakh per month in 2008, taking on Sony Ericsson, the number two player. Industry sources said giants like Nokia sell around 4 million handsets a month followed by Sony Ericsson, which is a distant second at around 4.5 lakh followed by Samsung and Motorola and LG.

A part of BK Modi's MCorp Global, the company entered the GSM handset market space three years back. With a three per cent market share in the market, the company is already ahead of LG that has about a two per cent market share. There will be new products to cater to the consumers in these markets.

“We are going to launch about 15-20 handsets in 2008 including around six CDMA devices,” Ahooja said.

The first GSM device to be launched will be a 3G phone, a People's phone for sub Rs 1,000 and a DVD handset (for approximately less than Rs 20,000). These are expected to be launched in February and be made commercially available in February, March and May respectively. The DVD handset will have a slot for the new generation compact DVDs to allow movie watching.

“The CDMA phones will be available in the open market and not tied to either CDMA service provider,” said Ahooja. Then there is a gaming phone in the pipeline as well.

Spice Mobiles are made in China by contract manufacturers like Inventek, Asus and Vistron and imported to India.