Mobile phones: Ringing in the moolah

Mobile phones have a luxury enigma. “People buy luxury products as an extension of their lifestyle and personality,” says Deepa Misra Harris, consultant for luxury and hospitality brands. “It says ‘This is me’.” But how exactly do you stay luxurious and different from the rest of the herd when almost everyone on the face of the planet has it?

Art curator and luxury consultant Arvind Vijaymohan defines luxury as “quality, heritage and legacy coming together in perfection”. While this might work for a handcrafted bag from a centuries-old European atelier or a bespoke fashion house, how does it work for a product that’s all about the latest technology and features and will be obsolete in a year?

“Phones are one of those rare categories where luxury is accessible to more people than a typical luxury product,” said lifestyle consultant Ashwin Rajagopalan. “Even if you carry something like an iPhone 14 Pro Max, everyone (in your circle) might be carrying one. (Even those outside of your circle) can get one with EMIs and cashbacks.”

Mobile phone manufacturers had tried to break out of it. Nokia had Vertu, its luxury phone brand, back in 1998. The phones came with all the luxury work – gold, sapphire bezel, jewels and black leather. “It worked for a while because a phone didn’t do much more than make calls at that point,” Rajagopalan said. But when the smartphone era arrived, “Vertu was unable to create a real customer experience beyond the luxury trappings”.

Today’s mobile phone market is characterized by camera features, artificial intelligence, operating system ecosystems, memory, storage and many other technical features. You need cutting-edge innovation, and one killer new discovery can change the entire landscape overnight. This makes it difficult for a luxury brand to play in the same territory, perhaps limiting luxury amenities to a designer phone case or other accessory.

But while it may be impossible to own a ‘unique’ phone, something strange has actually happened in India’s mobile retail business – a clear and distinct shift towards expensive phones. “The proportion of phones costing more than Rs 30,000 was 4 per cent in 2019; it rose to 9 percent last year,” said Varun Mishra, senior analyst at Counterpoint Research. “In terms of value, the constitution accounts for 28 percent of all smartphone revenue.”

Global growth in the price segment of $1,000 and above was a whopping 94 percent.

Indian phone users have shown a clear preference for upgrading their phones. “As 5G becomes more mainstream, consumers are upgrading their devices,” Mishra said. “Consumers whose finances have not been impacted by the pandemic have used the extra disposable income created by travel restrictions to buy more expensive devices, including smartphones. During the pandemic, users also realized the importance of smartphones and saw more value in upgrading their devices. Another interesting factor is that this trend is pervasive in the ultra-premium market in all regions, despite inflationary pressures.”