Suddenly, all smartphone brands want to share a pie in the premium segment, so far practically dominated by the two giants Apple and Samsung. Possibly, OnePlus showed them the way with its success, selling OnePlus 6 and the others are now lining up their offerings.
Some, like Xiaomi, have to face the Positioning issue since the customer perception on the brand has to be reworked. With Xiaomi and Redmi brands already selling phones at different price levels, Xiaomi has now come up with an all new brand POCO which will be used to launch the premium smartphones. POCO phones will be sold in India and worldwide.
Xiaomi has appointed a dedicated Product Manager for the premium brand in India. The basic infrastructure will be provided by Xiaomi but some fresh thinking will go into designing these new phones and will take advantage of the overall maturity the Indian smartphone market has attained, in terms of price elasticity. It is being quoted from market survey reports that the number of people willing to pay more that Rs 20,000 for smartphones has now gone up in the country and the high-end phones are now retailing at around $1000.
The major advantage in being present in the premium segment is that the profitability is much higher than in the lower segments. The competition is quite intense in the middle and budget phone segments and you have to keep a close watch on your pricing. In the high-end market, not every brand can afford to be a player and that gives certain leeway for the ones with the capability to push their phones. But it is easier said than done. There have been several cases of brands trying to do this but not being successful. At least one Indian brand Mircromax and an international one Lenovo, can be cited as examples.
Some have tried the online-only route; it is inexpensive and one can make an exit also easily. Those depending on offline sales will find it more challenging as it happened with Micromax.
As indicated, in the current situation, Samsung, Apple and OnePlus together control up to 88% of the premium smartphone segment in India. Xiaomi has its work cut out.