Is Reliance LYF Smartphone is Feeling The Pinch of Market Competition


With all fanfare, Reliance Jio launched its branded LYF Smartphone brand and very quickly captured the market share. Thanks to its retail segment reach but unfortunately the reality bites them sooner than later. Indian Smartphone segments is a crowded segment with more than 175 brand operating in India whereas total addressable market hovers around 95 Mn to 105 Mn. If one consider the grey market also then the total addressable market comes to 125 Mn a year.

We should also realize that Smartphone player runs their business with razor thin net margin in the range of 3 to 6% whereas earns maximum profitability through application embedding and converting their device as advertisement platform.

While in the midst of launching their much awaited 4G service, Reliance LYF devices which hits the market is considered as entry level device with ROM specification of 512 MB to 1GB . They have launched Flame 4, 5,6 with lower specification at lower price point whereas Flame 2 also got launched at a price point of INR3444. The companies like Intex, Karbonn, Lava, Spice and Celkon are well entrench in that segment with competitive price point and branding. The toll of that is visible on LYF brand with recent 25% price cut. In my personal view, the initiative is one of the way to buy out the marketplace and trying to throw the competitor out of the block but it seems bleak as the current price point of the LYF is still way above the competitor device price point.

In my opinion, Reliance LYF Smartphone department should find out alternative mechanism to generate the revenue and cover up the lost revenue post price deduction 

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Visionary Leader with 22 years of multi-functional experience - combine astute tactical, strategic, business, technology and industry skills in ICT domain at domestic and international level (Wired/Wireless/ networks /platforms/ connected device) .... More

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