Xiaomi Redmi 2 In India: A Torchbearer Of 4G LTE Revolution

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Today, world’s most valuable tech startup Xiaomi surprised the market pundits once again by introducing Redmi 2 in India – the successor of it’s the most successful entry-level smartphone, Redmi 1S. The company has priced the device at $115 (Rs. 6,999) and is hoping it to be the game changer for entry-level smartphone market in the country. And, why not, this is the cheapest smartphone with 4G LTE network capability, currently available in India.

The new Redmi 2 promises 50% more processing power than its predecessor and comes with Qualcomm’s Snapdragon 410 chipset. The device sports a 4.7” IPS HD display, 8 MP rear camera, 2 MP front camera, Dual-Sim, expandable memory slot, 2200 mAh battery and energy efficient Hexagon DSP core that optimizes the device for long lasting and power-packed performance. You can read more about Xiaomi Redmi 2 specifications here.

The biggest attraction of the device is its 4G LTE capability that will allow users to experience of blazingly fast 4G internet and buffer-free internet video. By placing a 4G LTE capable device in the entry-level smartphone market in India, Xiaomi has outplayed the competitors, especially Lenovo A6000 and just launched Motorola Mote e (2nd generation).

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4G LTE For The First Time Smartphone Users: A Miscalculated Approach By Xiaomi ?

Some of you may be wondering if there is any real need to introduce 4G LTE capability in a device that is meant for first-time smartphone users who may not be power users. Besides that, the majority of these first-time smartphone users come from Tier-1 or Tier-2 cities of India, where mobile infrastructure is not that great, with a spotty 3G coverage at best in most places.

Xiaomi strongly believes that technology can empower anything and everything, be it Air purification system, Mi TV or even action camera. It is a company known for taking new technology to the consumer as quickly as possible at attractive price points.. The company is also known as “Apple of China” due to the ‘influence’ it has on its products – and management. Therefore, it’s important to recall a quote of Apple’s visionary CEO Steve Jobs, “people don’t know what they want, unless you show it to them.

But that’s not the sole reason why Xiaomi has apparently decided to fuel the ongoing war in entry-level smartphone by launching a 4G LTE capable device, at the dirt-cheap price in India. In fact, one wouldn’t be surprised to learn if Xiaomi is leaving something on the table to penetrate the market deeply. It’s a well-calculated risk taken by Manu Jain, Head Of Operations – Xiaomi India – to become the torchbearer of 4G revolution in India.

4G LTE Demand In India is Set to Boom

It has been estimated that India will have more than 100 million 4G connections by 2020. Currently, Airtel is the only operator offering 4G services to its clients, but in a very few cities. However, Reliance Jio is all set to make the biggest roll out of its 4G services in across 800 cities of India between April and June this year, which would fuel the demand of 4G enabled smartphones and tablets. The majority of this demand and growth is expected to come from Tier 1 and Tier 2 cities of India where the consumption of mobile data is increasing, with an explosive adoption of video entertainment content.

Government of India is also working closely with mobile carriers to ensure quick roll-out of 4G network. To this effect, the government has allowed telecom operators to offer 4G connectivity on 1800 Mhz spectrum, which was being used only for 2G services and is the global standard for 4G connectivity in many countries. Globally, 108 operators are commercially offering 4G services on 1,800-MHz band in 58 countries. This will help other smartphone OEMs to introduce their 4G devices to India. Consequently, the demand of 4G data would spike in the coming months

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“We recognize the vision of 4G and the worth of LTE technology and believe that it is going to be the next revolution in the telecom sector with a great potential for Indian economic growth,” said Ravi Shankar Prasad, Communications and IT Minister of India, while speaking at the Vision 4G LTE Telecom Conclave 2015, recently.

Now, lets have a look on the smartphone sales figure in India during the last four quarters; In 2014, 81.8 million units of smartphones were shipped in India, 69% of it belonged to sub-$200 price category and 49.7% sub-$100 categories. Therefore, it’s clearly evident that the growth of the smartphone industry in India is driven by entry-level priced sub-$200 devices. Until the end of last year, the Indian market did not see a launch of 4G LTE enables device in this segment, until the launch of Xiaomi Redmi Note (4G). The company is offering 4G variant of the device at $160 (Rs. 9,999) that has caught the fancy of Airtel customers. However, considering the fact that half of smartphones, shipped in 2014, had belonged to $100 price category, Xiaomi has played a masterstroke to outplay the competition by introducing another 4G enabled device at an attractive price.

The another important factor to be kept in mind is the consumption of mobile internet in non-metro cities of India. Mobile network operators are insisting big on faster connectivity of 4G network and also promising uninterrupted and buffer free broadcast of live videos and video contents on mobile devices. According to Nielson Infomate Mobile Insights, the penetration of video apps in Tier1 and Tier 2 cities of India is higher than metros. Tier 1 cities lead the pack with 53% of penetration, followed by 49% in Tier 2 and 43% in metros.

“Consumers in small towns use their smartphones as the only access to the World Wide Web. Consumers, especially youth in these cities, have leapfrogged over the personal computer, and have directly moved on to the personal screen—the smartphone. At Nielsen Informate, our analysis has continuously shown that small town customers are quickly adopting smartphones and are bigger users as compared to their metro cousins,” said Prashant Singh, managing director (media), Nielsen India.

Xiaomi is known as ‘mobile Internet company’, and wants to be a platform for services and not just a hardware vendor. Therefore, it becomes essential for the company, to reach the power user of mobile internet users across the country. And, by penetrating the market with extremely affordable devices the company is creating the market for its paid services and apps. The early market penetration by offering 4G enabled devices is possibly the best strategy to adopt given that 4G networks are set for a big leap around the country. With Redmi 2 at $115, Redmi Note at $160 and upcoming Note Pro, Xiaomi should strengthen its presence in the 4G devices market. Now, the only challenge for Xiaomi could be ensure it meets the demand with sufficient supply of devices – something that has been upsetting its fans for sometime now.

The sales of Xiaomi Redmi 2 will start from March 24, but the registration will start today at 6 PM, exclusively on Flipkart.

3 COMMENTS

  1. i want to xiaomi mobile like redmi note 4 g lte but i know in the future xiaomi will release more mobile rupees 12000 include lte and other more function

  2. Point is that they have launched 1GB version, although the company promises that it will launch the 2GB version soon… Question is why would people buy now … rather wait for the Enhanced edition Or buy the moto e (2nd gen) OR something else… People might have regret regarding their purchase that if they buy 1GB version now and soon 2GB version arrives just after a month… Xiaomi is asking for lot of patience from their customer with the limited availability of phone stock…. Mind games…

  3. Great analysis !!!! I am data scientist though, you people keep surprising me with the facts, statistics and thought processes. Keep the good work going.

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