It's Nano all over again — in smartphones. In August last year, Intex launched the world's cheapest smartphone in India. Priced at Rs 1,999 and running on Mozilla Firefox operating system (OS), this phone was supposed to be a winner in a fast-growing but price sensitive market.

Three other brands, Spice, Zen Mobile and Alcatel One Touch also sold ultracheap smartphones running on Firefox OS. There were online deals with Flipkart and Snapdeal. But the data is in, and the Nano of smartphones, just like Nano the car, has flopped. Data from Cybex Solutions, a firm that tracks export import data, shows between August and December, only 154,000 Firefox phones were imported.

And in January and February, Zen, a really small player, imported around 10,000 of these phones. These are minuscule numbers compared to average monthly sales of 7 million smartphones in India. The market verdict has been as quick and as harsh for ultra-cheap smartphones as it was for the ultra-cheap car.

Mozilla's senior vice president of business and legal affairs Denelle Dixon-Thayer said in an updated response to ET's questions: "The Cloud FX with Intex Technologies and Fire One MI FX with Spice are no longer being produced because they reached the end of their life cycle."

"We are now focusing on the next generation of Firefox OS devices and are really excited to be working with our partners on those," she added.

Firefox phone vendors agree

Firefox phone vendors ET spoke to were unambiguous in their agreement that the ultracheap phone hadn't taken off. Firefox phone-sellers say imports are somewhat more than Cybex data but they don't deny the failure of 'Nano' smartphones. "There was little commercial viability," said Sanjay Kalirona, head of mobile business at Intex.

Spice Mobility's CEO Prashant Bindal says, "It doesn't matter even if you're providing smartphones at very low costs...the consumer had to be convinced that they should buy this phone." Zen Mobile Managing Director Deepesh Gupta said, "People don't mind paying a little more for phones they like more." In August last year, Kalirona had told ET three more Firefox smartphones, including a 3G-enabled one, will be launched within a year.

Those plans are now all history. And the Firefox, ultracheap smartphones' failure reaffirm a very important consumer behavior insight - price conscious they may be, but Indians don't like to upgrade into a new product category via a brand that signals "cheap". As brand consultant Harish Bijoor puts it: "Low cost is politically correct way of calling something cheap but people see through it."

Those looking for a affordable hatchback bought Maruti Alto rather than Nano, Bijoor says. The middle common denominator, not the lowest common denominator, is what people looking to upgrade feel comfortable with, he points out. In smartphones, say market observers, this is playing out via affordable Android phones.

Firefox phones priced between Rs 1,999 and Rs 2,300 looked like cheap smartphones but Android phones priced between Rs 3,000 and Rs 5,000, which were never marketed as ultracheap and offered the superior Android OS, attract many more customers wanting to upgrade from ordinary phones. "Making cheap phones doesn't matter anymore," said Jayanth Kolla, co-founder of telecom research firm Convergence Catalyst. Phone-sellers learnt this the hard way just as the car-seller did.

Source:- economictimes.indiatimes.com