Reliance Retail brand LYF Sells approx 15 Lakh Phones at Rs 700 Crores in Q2 2016
4G enabled devices are growing rapidly across the globe. And when you talk about India, it is a similar case. On the same lines, if you see some statistical data around this, the results will be quite surprising. Shipment of 4G devices in the country grew 18 percent in Q2 2016. This is a significant increase over 18.2 million in Q2 from 15.4 million units sold in Q1. We are looking at a huge number here. It is expected that about 125 million 4G devices will be sold by the end of this year in total.
Now let’s talk about market share. Of the total shipment, smartphones accounted for about 97.8 percent. This number is followed by data cards which is about 1.6 percent and then the Tablet PCs comes to about 0.6 percent. Undoubtedly 4G enabled smartphones are clearly taking over the market here. The South Korean smartphone manufacturer Samsung, led the smartphone market with about 41 percent market share. Other major players in the countries include Micromax and LYF.
Micromax is one of the oldest players in this category and has about 8.6 percent market share. Whereas LYF, who just entered the market with their budget 4G devices now has 8.5 percent market share. Surprised much? Now let’s do a little math here. Out of the total 18 million devices having 8.5 percent market share is also huge. We are talking about over a million unit sales here. And if you remember, during Q2, most of the LYF devices were selling only in the price range of 4,000 INR to 5,000 INR. So it pretty much comes to over 700 crores in sales. These are just approximate numbers and when a Rs 4,500 is taken as the ASP the total sales of around 700 crores is derived.
1,82,00,000 * 8.5% = 15,47,000 (Total LYF Phones Sold)
15,47,000 * Rs 4,500 = 696.15 Crore
So when we talk about a new player like LYF in the market and getting almost equal share as that of Micromax, who is here in the industry for quite some time now, then there has to be some major back play here. Well, there certainly is. It is none other than the Jio 4G preview offer. These LYF smartphones came with the Jio preview offer and that actually worked out a lot for them. Most of the sales were due to this offer because LYF smartphones by themselves are not something you would be buying. And now with the offer being extended to all the smartphones, it will be interesting to see how the numbers will change in coming quarters. We are yet to receive the actual numbers for Q3, though we have some reports from the offline markets that they were much stronger than the Q2 primarily because of the increase in the JIO userbase. Though post the Jio 4G Announcement these SIM Cards have been offered to any 4G Smartphone which is why the demands for LYF devices have gone down.