India Datacard Market: Ascendance of MiFi Devices

India is one of the fastest growing technology markets. In the past 2-3 years we have witnessed India adopting the latest technology in every possible area. And the same applies to the telecommunications sector as well. We have seen latest smartphones, tablets and datacards making inroads into the hands of Indian consumers.

Mobile WiFi devices, or MiFi devices, in short are catching on and driving the growth of the India USB Modem / Datacard market rapidly. From no or negligible presence in 1Q 2012, MiFi device shipments rose to a substantial 42% of total datacard shipments in 4Q 2014. During CY 2014 MiFi devices saw an increase of 86% from 1Q 2014 to 4Q 2014. This sharp growth reflects the demand in the India consumer segment for MiFi devices.

CMR's India MiFi Devices Report

The primary reason for the fast-paced growth in shipments of MiFi devices could be their ability to support multiple devices, which was earlier possible only with WiFi routers. Also, WiFi routers were not portable and were connected to the cable broadband network. MiFi devices have provided the flexibility of creating a portable WiFi zone, which has caught the imagination of the youth, particularly students, young executives and nuclear families. These segments find MiFi devices friendlier, as the accessibility is not restricted to a single location.

MiFi devices are used by plugging into a power source, which could be a constraint. But the solution to this problem is battery-enabled MiFi devices that have already started coming into the India market. It is likely that in a short span of time, we will see most MiFi devices being shipped with an inbuilt rechargeable battery. This will impart further impetus to adoption, as consumers would find further flexibility and ease for accessing the internet, anywhere, anytime.

According to CMR numbers, currently Huawei enjoys a near-monopoly in MiFi devices with an 83% share of the market in terms of unit shipments during CY 2014. A distant second is Lava at 11%, followed by ZTE at 3% share. Huawei continues to lead in the overall India Datacard market with a 40% share in terms of unit shipments during CY 2014, followed by ZTE at 28% and Micromax at 15%.

The year 2015 poses a challenge to Huawei in the WiFi device segment, as the share of MiFi devices as a proportion of overall datacard shipments in India rises rapidly. With the new government promoting the idea of ‘Make in India’, we can expect to see more players enter this lucrative segment over the next few months, leading to increased competition and pressure on margins. Huawei, ZTE, Micromax, Lava and other vendors will need to rapidly innovate and bring more value-rich bundles into the market, to stay ahead in the race for a share of the Indian consumer’s mindshare and wallet share.

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