Intex Expects Half of its Revenue to Come from Consumer Durables by the End of 2017

If you have been following the iSpyPrice blog you know that we have noted on several occasions just how nimble footed and proactive Intex Technologies has been this year. One of India’s leading smartphone makers is now making another move that will probably set it apart from its competition even further.

Intex has decided to improve its focus on consumer durables. That sounds like something every other smartphone brand would want to do. However, very few will aim to bridge the gap between the revenues generated through their  smartphone business and their consumer durables business by 30% in less than 18 months. That Intex intends to do this highlights the fact that they are extremely aware of a volatile market that is at its competitive best already. Intex actually expects that half its revenue will come from consumer durables by the end of 2017.

What are Intex’s long term revenue targets?

• Intex aims to push its consumer durables revenue from 15% in 2015 to pretty close to 50% by the end of 2017
• Intex expects its revenue from the smartphone business to come down from 80% to about 50% in the same time frame

This year, consumer durables should contribute about 25-30%. Mobile phones would have a point of saturation, and there will be ups and downs, but our focus will be equal on mobile phones and consumer durables.

– Keshav Bansal, Director, Intex Technologies

• Intex had revenues of Rs. 3,652 crores in the fiscal year ending March, 2015
• The revenues shot up to Rs. 6,213 crores in the fiscal year ending March, 2016
• That is a change of 70% year-over-year

According to several analysts due to a highly saturated smartphone market some brands are compelled to shift their focus on products other than smartphones. This is also true because consumer durables, such as wearables, offer better margins than smartphones. These brands will continue to expand their smartphone portfolios with interesting products, just as Intex has this year, but they will also want to help the bottom line by expanding on their consumer durables product portfolio.

Intex recently made its foray into the VR product market with its first VR headset. The Intex Eyelet VR cardboard comes with the Intex Aqua View smartphone. So it is clear that Intex has plans to explore uncharted territories such VR.

What is prompting Intex and other brands to shift focus to consumer durables?

More than a desire to tap into different kinds of products, this move seems to be a direct result of the slowing pace of growth in the smartphone industry. As shocking as it may sound to some folks, according to IDC, smartphone sales are experiencing a downward trajectory, as recently as earlier this year. With an influx of smartphone players and the almost absurd number of smartphone options currently available to the consumer in the market, chances are that as most consumers buy mid-range and low-budget smartphones they will probably stick to these phones for sometime. The high-end phone sales have seen a stark decline over the last 12 months or so because better products have been available for much less prices.

The charismatic Director of Intex Technologies, who also owns the Gujarat Lions IPL team, has also stated that by the end of the year all Intex phones will be made in India. It remains to be seen whether this move towards consumer durables proves a wise decision in the long run or not.

While Intex and other brands like Micromax shift their focus towards consumer durables in search of a better tomorrow it is important that they don’t lose sight of the present. As of now Intex is doing very well in its smartphone business and it should ensure that it ships more phones while also shipping more consumer durables. Choosing to focus on only one of those could prove to be a fatal error in judgement.