The Bible talks of much gnashing of teeth and wailing when final judgement visits those that have sinned. Well, similar are the sounds (well, metaphorically at least) that seem to accompany the announcement of prices of devices from ahem, some brands these days. Ironically, these are the very brands that had dominated the mobile landscape for years – the likes of Nokia (now Microsoft), HTC, BlackBerry, Samsung, Sony and LG. A few years ago, they seemed to set the benchmarks for offerings at different price points. Now, to some people, they seem hopelessly divorced from reality in a market whose price-performance expectations has changed radically over the past year.
And no, we are not talking about expected-to-be-expensive flagships. The groans of dismay that accompanied the announcement of the price of the Samsung Galaxy S6 Edge (Rs.58,900/$900 for the record), were as loud as those that were heard when Microsoft announced the Lumia 640‘s price (a relatively lowly Rs.11,999/$190), or when BlackBerry sent out a release revealing the price of the Leap at Rs 21,490. Oh aye, it is a very different world this, from the one that existed barely a couple of years ago – think 2013 and most people would have been glad of a decently specced all touch BlackBerry for under Rs 25,000 – ah, how times change!
Former blogger (and current Xiaomi-te) Clinton Jeff had summed up it up at the launch of the the Lumia 640 XL and 640 in India, quipping with typical cheekiness that some brands seemed to live in a world where the likes of Xiaomi did not exist. Ridiculous though that notion might seem to some, that at times does seem to be the case.
We too had been initially cynical about the prices of good quality smartphones coming down in the wake of devices like the Moto E, Moto G, the ZenFone 5 and the Lumia 520, not to mention the Xiaomi Mi 3. However, the months that have followed have seen this happen to an extent – today, as we mentioned in an earlier article, we live in a world where the Android flagship segment is split between the exorbitant and the affordable. Suddenly, the very brands that talked of hardware superiority are citing ‘experience’ (the word used by that fruity Cupertino company – oh yes, we do notice the irony) for a premium pricing.
But charging a premium for a flagship is one thing. Trying to charge the same at lower price points, where they often end up tangling with the flagships of the ‘online exclusive’ brigade, is a very different kettle of fish. Take today’s example – BlackBerry has priced the Leap, which is a mid-segment phone by its standards at Rs 21,490 (~$335). It costs less than half as much as its flagship, the Passport, but STILL costs more than a Xiaomi Mi4, a Lenovo Vibe X2, a OnePlus One (16 GB), and an Asus ZenFone 2 (32 GB), all of which boast significantly better specs in terms of displays, processors and cameras. Rewind to the Microsoft launch of the Lumia 640, and many reporters muttered that at Rs 11,999, the 640 cost more than the better specced Xiaomi Redmi Note 4G and the Honor 4X, and even the darling of the budget Cyanogen fans, the YU Yureka.
In many ways, this is akin to throwing your middleweight against a heavyweight, albeit of a slightly lower perceived quality. No matter how much you harp on brand equity and experience and (in the case of BB and Microsoft, difference of platform), the sheer weight of specs makes itself felt. One could not, for instance, compare a Lumia 730 against a Xiaomi Mi 3, and for all its virtues, a BlackBerry Classic looked positively jaded in comparison with the OnePlus One and the Moto X.
Mind you, there are some who feel that the smartphone old guard is not as dumb as it seems. “BlackBerry’s Passport sold out very fast,” a dealer told me. “And we are seeing the Lumia 640 do very good business.” And then there is the little fact that India is predominantly an offline market – those who purchase online are a small percentage of the total market. And when it comes to conventional retail and stores that cater to customers who like to ‘touch and feel’ a product before spending money on it, it is the older guard that holds sway over the relative newcomers.
It is not a comfortable sway, though. For, while many might still continue to believe in paying a premium for a relatively lower specced device from a ‘known’ brand, an increasing number of people are asking questions about the newer ones. And every glowing review that a device from the latter camp draws detracts from the brand equity of the established order and makes its premium seem more exorbitant.
Knowing what we do of the brands and those who work there, we doubt that the likes of HTC, Sony, LG, BlackBerry, Microsoft and Samsung are living in a world of their own, and are oblivious to the existence of the likes of Xiaomi, Asus, Lenovo and OnePlus. What, however, cannot be denied is that there does seem to be a lack of, well, respect for the latter. The “we don’t even compare ourselves with them” argument is beginning to sound a bit hollow, especially as one goes down the price ladder. I remember Gionee India’s Arvind Vohra snorting, “They don’t want to compare themselves with a Chinese brand like us? What do I care? The customer is buying us!”
A bit of change, tinged with respect, might be the order of the day. Along with the realisation that the days of hefty premiums are perhaps coming to an end, especially in the mid and lower price segments. And while we do not want to sound like Doomsday prophets, we suspect that if some pricing policies are not rejigged, the gnashing of teeth and wailing will issue not from the spectators, but from the older guard of the smartphone market itself.