As with so many things these days, it all started with a tweet. We had seen some references to a phone that cost Rs 29,999 (about USD 440) as being a ‘mid-segment’ and felt that this was actually an expensive device and more on the high-end side in price terms. But when we said so, pat came the answer: if this is expensive, what would you call the likes of the iPhone 6S, Note 5 and Xperia Z5 Premium which cost much more?
Which of course, sparked the whole debate about how can one define different price segments in the smartphone market. What was budget? What was mid-segment? And what was above that?
A few years ago, this was a relatively simple exercise. Anything above Rs 25,000 (about USD 350) was considered premium, the Rs 10,000-Rs 25,000 (about USD 150-350) was considered mid-segment, and the one below that was the budget segment. And the performance of the devices followed the devices – so a premium segment device performed outstandingly well, a mid-segment device was a notch below that, and well, the budget devices did a whole lot lesser.
Fast forward to today, and you have a OnePlus 2 that at Rs 24,990 pretty much matches the performance of devices twice as expensive as it is, or a Xiaomi Mi 4 that at Rs 14,990 can hold its own against devices that are exponentially more expensive. Heck, the first smartphone in the world to come with 4 GB RAM was not a premium device (as would have been the case a few years ago) but one that cost about USD 300 – the Asus ZenFone 2.
And it is this change in the price-performance ratio that is causing a lot of confusion in the classification of devices. For, if a device that costs Rs 29,990 (~ $440) is a mid-segment device, then a device that costs about half as much would be a low-end or budget device, wouldn’t it? And what do you have at that price point – the likes of the Xiaomi Mi 4, the Moto G (3rd Generation), the Lenovo Vibe P1 and the OnePlus X. Whatever they are, those worthies are certainly not low-end devices. Some might say that the segmentation depends on the income of households but then, it would vary as per every household – an iPhone would be low-end for those earning a million a month!
Which of course brings us back to the core question: how does one lay down price segments for smartphones in today’s market? One in which you get devices that churn out close to high-end performances at a fraction of the premium price segment. There is perhaps no clear solution, for the phone world seems to be slowly splitting into two parts – one that fights on perceived brand value and high end specifications and another that attempts to deliver specs of a similar level at much (MUCH!) more affordable prices.
Speaking purely in terms of performance, the Rs 6,000-Rs 15,999 belt would be the new mid-segment in terms of performance, with the likes of the Moto G (3rd Generation) and Moto G Turbo, Xiaomi Mi 4i, Lenovo Vibe P1 and S1, Coolpad Note 3, Meizu M2 Note, YU Yureka Plus, the Micromax Canvas 5, and a few others turning in very good performances and slightly off the high-end (the 16 GB Mi 4 is in that group but only after getting a price cut – it was launched at Rs 19,990). Go below Rs 6,000 and you generally get into the slightly more basic smartphone range, even though there are some very good devices that punch well above their weight there (most notably from InFocus).
Which of course, means that anything above Rs 15,999 would be considered high-end. This might sound outrageous on first glance, but take a look a look at the devices close to the Rs 16,000 price point and you will find you can get the OnePlus X and One, and the 64 GB edition of the Xiaomi Mi 4, all of which come with good cameras, good processors, ample RAM and full HD displays – the sort of specs you would associate with high-end devices. Get closer to Rs 20,000, and the likes of the Moto X Play, the Meizu MX 5, the Qiku Q Terra and Asus ZenFone 2 come into play – once again, delivering relatively high end performances. Up the ante to Rs 25,000 and you have the OnePlus 2, Nexus 5X and 6, and Lenovo Vibe Shot coming into contention, none of which can be called mid-segment by any measure.
All of which would indicate that Rs 16,000 might well be the new price point dividing the good from the very good. But what of the much higher priced devices like the iPhone 6s, the Nexus 6P, the Sony Xperia Z5, the LG G4, the HTC One M9+ and the Samsung Galaxy Note 5? We guess we have reached the stage where anything above Rs 30,000 can be called “premium” and if anyone really wants to play around with nomenclature, anything above Rs 50,000 can be slotted as “super premium.” What, however, is REALLY fascinating is that a number of “traditional” smartphone manufacturers are still following the old price segmentation model – the likes of HTC, Samsung, Sony, Microsoft and LG for instance, doggedly refuse to offer a full HD device with a powerful processor and a good camera for less than Rs 20,000 (their prices may dip below those levels later, but the launch prices are initially higher) and also price their flagships at Rs 45,000 and above (we are excluding Apple from this group because the Cupertino company has always positioned the iPhone as a premium product).
The result? We do think there is a reason to think that Rs 6,000 – Rs 16,000 (around $100 to $250) is the new mid-segment and anything above that the high-end. Mind you, thanks to the difference in seller and manufacturer approaches, what is mid-segment for a certain type of manufacturer is flagship and premium for another – the OnePlus 2 and the Samsung Galaxy A7 both cost close to Rs 25,000, for instance.
All of which does cause a bit of confusion for those wanting to classify the market. But we cannot see consumers complaining at the surfeit of choice. Which, at the end of the day, is what really matters. It is technology that really counts, not terminology.