Home-bred handset maker Micromax Informatics plans to initially invest Rs 100 crore on services and innovation as it tries to move beyond the business of mobile phone hardware that has become more or less standardised. As part of the exercise, the Gurgaon-based company is developing a new set of smartphones on a forked version of the Android operating system, people privy to the development told ET.
The venture, code named Project Yureka, is likely to be formalised over the next two months, these people said. Part of the initial investment will go towards setting up research and development centres in Bangalore and Beijing, besides hiring top coding, programming and marketing talent.
"The processes are being formalised and it will take about two months for things to begin," said Micromax's co-founder Rahul Sharma. He did not say whether the company will create a separate wholly-owned unit for launching these set of devices, which may not have Google's stock Android operating system.
"We have a certain tailwind and we're moving in the right direction. I feel now that the hardware is fine but the next disruption has to happen on the software side where we will be empowering users," Sharma said without elaborating. Trade sources said Micromax could be in discussions with Cyanogen, the maker of Cyanogen-Mod, a modified version of Android that is a popular alternative OS and is installed on over 12 million devices worldwide.
Cyanogen did not respond to ET's queries seeking confirmation of its partnership plans with Micromax and its contours. Analysts tracking the burgeoning smartphone market in India said the next logical step for Micromax would be to look at services and innovation as the mobile handset space in India has become cluttered and highly competitive. Micromax has a 14 per cent share of overall devices in the country, second only to market leader Samsung with 17 per cent. It trails Samsung in the smartphone space as well with 18 per cent share compared with the Korean firm's 29 per cent share.
"Indian original equipment makers need some differentiation in their product strategy," said Jayanth Kolla, co-founder and partner at telecom research firm Convergence Catalyst.
"They have very little differentiation among them at the product level. So, building over the stock Android, modifying look and feel of the user interface can help offer a differentiated experience," Kolla added. Indian handset makers have followed the established model of sourcing mobile phones from China and selling them in India, replicated by a number of brands that have spawned since the likes of Micromax, Karbonn and Lava.
The three together hold 32 per cent of the smartphone market and some have already begun innovating. Lava launched the Hive user interface (UI) in August on Xolo 8X-100 smartphone model priced at Rs 13,999. The UI features customised elements including themes, launcher, widgets, customised system apps and direct connect with Xolo's software development team to offer feedback.
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