The 5G spectrum auction in India signals the advent of next-generation network connectivity services for smartphones and Internet connected devices. In preparation for the arrival of 5G services in India, manufacturers have been working on 5G-capable products and aiming them at customers looking to tap into the advantages promised by 5G connectivity. Gadgets 360 interviewed Madhav Sheth, CEO, Realme India, VP, Realme and President, Realme International Business Group. Earlier this week, the company launched a new 5G-capable tablet, alongside other wearables. Like most brands in India, the company also sells smartphones capable of this next-generation connectivity, from affordable models to the premium segment.
We discussed a wide range of topics, including the ongoing global semiconductor shortage, demand for 5G capable devices in India, the company's plans for premium and foldable handsets, its strategy for a product ecosystem, and more.
Gadgets 360: What are the key takeaways for Realme after it launched its first tablet in India last year? How has the market responded?
Madhav Sheth: People continue to work from home, learn new things, play games, and engage in a variety of other activities, which has led to a growth in tablet demand. Out of all, e-learning has played a significant role in boosting the use of tablets. Additionally, tablets are evolving into a practical product to use and operate in "work from home" circumstances.
Realme received requests from customers to launch new tablets, which prompted us to launch our first tablet in September last year. It garnered resounding success and captured 4 percent market share in 2021, as per Counterpoint. As of Q1 2022, we were also the fourth largest brand in the tablet segment as per CMR.
Gadgets 360: How has the company adapted to deal with the ongoing semiconductor shortage that has impacted businesses globally?
Madhav Sheth: The semiconductor shortage has been impacting the smartphone industry for quite a few months now, but as expected by most of the industry players, the shortage is easing up and we should be able to see better output in H2 2022.
As a brand, we had foreseen and prepared for this situation and took the appropriate action to prevent any product shortages or delays. We collaborated with mainstream chipset makers and third-party suppliers to ensure that we can withstand the chip shortage crisis that the industry was going through.
We engaged proactively with manufacturers and suppliers to ensure that our current products are not subject to supply shortages. And I think our approach worked well because all our recent handsets have the most up-to-date processors. We have consistently introduced cutting-edge smartphones and have been at the forefront of innovation. We identified a need for these products among our users, therefore we decided to launch them. However, it goes without saying that we will have more opportunities when the semiconductor bottleneck eases.
Gadgets 360: With the company increasing its offerings in the high-end smartphone segment, how does Realme plan to address software support?
Madhav Sheth: Realme as a brand has always been committed to provide regular software security updates on all Realme smartphones. At least two years' worth of bi-monthly security updates is our goal. Many of our Realme smartphones have already got an update of the latest Realme UI 3.0 running on Android 12. Realme UI 3.0 adheres to the inspiration of seamless fun and we will continue to improve on functionality, fluency, customisability, security, and privacy that young users are concerned about.
Gadgets 360: Is Realme exploring foldable phones? If so, can we expect one this year?
Madhav Sheth: Foldables are a highly intriguing idea, however, this technology is still in the research and development stage. I believe that the technology is not commercially ready. At Realme, we don't want to bring in a product that may serve our consumers for only a short period of time. We believe in bringing products that benefit consumers in the long run and cater to their immediate needs, which is why our R&D is focused more on bringing innovations in the camera and fast charging areas. This approach has worked well for us over the last four years, and we intend to continue following the same.
Users are currently looking for 5G smartphones, and we are aiming to give them a variety of options. Also, if you look at the smartphone market, most of the fastest-charging devices are offered by Realme. As a brand, we keep on adding new camera functions to smartphones which elevate the user's daily experience.
Gadgets 360: Is there still a significant price difference for phones that have 5G? Do buyers feel they are compromising in other areas such as cameras with lower-cost 5G phones?
Madhav Sheth: Realme entered the 5G smartphone industry as a disruptor and pioneer when other manufacturers were still cautious. Today, Realme is at the forefront of 5G democratisation in emerging markets like India; the first to provide a 5G smartphone device in the mid-range phone market. Recently, Realme's 5G shipments have grown the most among all major smartphone brands with a 165 percent YoY growth in Q4, 2021 as per Counterpoint.
Gadgets 360: Will Realme keep selling non-5G devices, and at what prices will that still be relevant? What will the market look like for those by the end of this year?
Madhav Sheth: We know that there are still consumers who need 4G smartphones as per a survey we did with the Realme community. Owing to this, we have introduced 4G editions of smartphones in multiple series this year which are dedicated to offering stable experiences with outstanding innovations, and will continue to do so if our users as looking for specific products.
We have smartphones ranging from as low as Rs. 7,499 and we will make sure users never run out of choices with Realme products.
Gadgets 360: Will the actual launch of 5G networks expected at around Diwali time lead to another surge of sales?
Madhav Sheth: All companies are preparing to provide customers a variety of options throughout the festive season, which is undoubtedly a pivotal time for all brands. Due to the numerous discounts that various brands will offer to customers, I'm confident that the demand for 5G products will continue to grow along with other electronic products.
Gadgets 360: Do people see a benefit to 5G? Do you expect data plans to be too expensive, will there be demand for it?
Madhav Sheth: Ever since the mention of 5G coming into play, there has been excitement among users. Everyone understands what 5G will bring to the table. 5G is not just about faster data or superior connectivity, it is also about the overall experience that a user gets when using these networks, given that 5G has low latency and higher speed. I believe 5G will also play a significant role in the growth of smart homes soon, enhanced medical practices, and increased security. When it comes to the pricing of 5G data plans, the auctions have just started. We will have to see how things unfold.
Gadgets 360: How is Realme poised to take advantage of 5G across its ecosystem?
Madhav Sheth: Realme has always latched on to the industry's leading technologies to provide its users with the best of experiences. Realme was the first brand to bring a 5G-enabled smartphone to India in 2020. Ever since then, we have expanded our 5G smartphone portfolio and brought in various other devices that will enable users to experience the advantages and convenience of 5G. Now, we are taking one step forward and bringing 5G to our extended AIoT portfolio. We aim to be a 5G democratiser, and in line with that, we launched the Realme Pad X 5G, which is the industry's first 5G tablet in the premium mid-range segment. It uses a 6nm Snapdragon 695 processor which is bound to give users an unparalleled experience.
We see a huge opportunity with 5G, especially because we are building this TechLife Ecosystem to provide a trendy and connected lifestyle to our users, and 5G will play a huge role in the growth of smart homes in India.
Gadgets 360: Is there data showing that people prefer to stay within one brand's ecosystem for all their products? Or do they just buy what's cheap or good at the time?
Madhav Sheth: In the past few years, the Indian consumer market has grown at a sizable pace and is expected to see robust growth in the coming years. Low interest rates of consumer loans and the rise in disposable income are the major drivers of the growth of the market. With easy finance schemes, people across all income groups can fulfil their needs. Moreover, the increase in consumption of consumer goods in Tier II & III cities is also one of the key factors, and the leading brands have increased penetration in these cities.
Post the pandemic, people are more open to adopting smart technology inside their homes. The concept of connected homes is coming into the light. However, whether they want to create this ecosystem with just one brand or multiple brands, is up to them.
While a lot of users prefer being part of a single brand's ecosystem, the purchasing habits of users in India depend on multiple factors such as disposable income, trust in a brand, and brand influence. Their experience with a brand in one category, say for example hearables, may have been better with brand one, but the same brand may not have given them the same experience with a smart TV, hence they go to a different brand.
What I can say is that being part of a single brand's ecosystem has multiple advantages. To give you an example, if you are using a Realme smartphone, TWS, smartwatch, and smart TV, you can link them all together and control everything with the Realme Link app. This not just adds convenience but also enhances the experience of having a smart home. Similarly, all other Realme TechLife products can be linked together using the Realme Link app and controlled using the smartphone.
Gadgets 360: What is Realme doing to build brand loyalty when it comes to buying so many products and accessories?
Madhav Sheth: We have always been user-oriented, and I believe whatever we have achieved in the last four years speaks for itself. From being a new brand in an already established market to becoming one of the fastest growing brands is a huge feat, and we take immense pride in it.
I believe one of the practices that have worked in our favour is that we constantly collect feedback from our community members and users at large and incorporate it into our products. The fact that we are this open and receptive to feedback has been appreciated. While deciding the technical aspects of a product, or its design, we do go back to our customers, ensuring that we are giving them a good product.
We also believe that our omnichannel approach has helped us reach and connect with a much larger user base in India. While a large portion of users are comfortable purchasing products online, there is one set of users who still prefer to get a feel of the product before buying it. Realme has had a strong partnership with online platforms such as Flipkart and Amazon and has developed a robust mainline network across the country.
Another factor that has helped is the quality of our products as well as after-sales service. Over the years, we have mastered the art of bringing best-in-class products, and if by chance a consumer needs redressal, we have a strong system in place. I believe that goes a long way in a brand's journey to success.
Gadgets 360: How are Realme, Techlife, and Dizo products differentiated? Why is there overlap and replication?
Madhav Sheth: To create a smart, connected, and trendy lifestyle for everyone, Realme launched its Realme TechLife Ecosystem which is a technology product ecosystem and also a business collaboration network to realise the intelligent connection of all AIoT categories built by Realme's “1+5+T” strategy. Realme TechLife Ecosystem is a dual-trademark product matrix, including the Realme trademark which is centred on smartphones and extends to five key categories of TV, wearables, TWS, laptops and tablets, and tech products of Realme TechLife trademark in three categories: Smart Life Care, Smart Entertainment, and Smart Connect.
With the Realme TechLife Ecosystem, we are also providing a platform to other smaller players in the market to create and sell their products. Dizo is the first brand in the ecosystem and is supported by Realme in three key aspects: industrial design, supply chain, and AIoT experience with the Realme Link App.
Gadgets 360: How do TechLife products such as ACs and washing machines play into the overall strategy? These are not IoT or connected products, and not even manufactured and sold by Realme?
Madhav Sheth: Realme has put together a 1+5+T strategy for its entire product ecosystem, where ‘1” is the core hub, which is the smartphone; ‘5' is the other categories including hearables, wearables, Smart TVs, laptops and tablets; and ‘T' is Realme TechLife which offers products for Smart Life Care, Smart Entertainment and Smart Connect. Realme TechLife supports innovative startups and collaborates with top brands to offer their products including ACs, washing machines, etc, to create a comprehensive tech lifestyle.
Gadgets 360: How has the response been to headline features like 150W fast charging?
Madhav Sheth: Our decision to bring 150W charging on smartphones such as the Realme GT Neo 3 has received quite an exhilarating response. In the past, Realme had also announced other significant innovations and they have all been well received by our consumers. We aim to continue following this track and bring more and more advanced technologies for our users.
Gadgets 360: After launching phones above the Rs. 40,000 price point, do you have plans for more luxury products across segments?
Madhav Sheth: Realme has already carved a niche for itself in the entry-level and mid-level segments and entering the premium segment with our GT series was the next step for us. With the GT series, we aim to explore more possibilities in the premium smartphone segment and expedite our leadership, and we will continue on the same path.
Gadgets 360: Have you been surprised by the demand/ enthusiasm for any new product or category?
Madhav Sheth: Every time Realme decides to launch a new product or enter a new category, we study the market in depth to understand whether there is a demand in the segment. We only launch new products as and when required by our users, and therefore all new products that we have launched and categories that we have forayed into have performed well. We have been able to establish significant market shares across categories and will continue to expand them.
Gadgets 360: What are the most common demands from fans or buyers that you want to address?
Madhav Sheth: We have a vast user base in India and across the globe, which means that we get different demands from different markets. Each consumer is looking for something specific when they go out to buy a product, and our aim is to meet those demands along with providing them with other industry-leading features helping them with a holistic experience. If you look at our product portfolio, we have something for everyone across categories.
Gadgets 360: How has consumer feedback influenced the design or features of recent products?
Madhav Sheth: Through research and feedback sessions, we have been able to understand what works best for our consumers, be it in terms of design or tech specifications. What we have observed is when it comes to design, consumer feedback is largely influenced by what is already available in the market. On the contrary, we are an innovative brand that loves to experiment with designs and colours in order to bring uniqueness to our products. This is where our industrial design team comes into play. The team works with multiple materials and runs various experiments to come up with something that is exclusive to Realme and sits well with the users.
To cite some examples, the Realme 1, which was our first smartphone ever, came with a diamond-cut design on the rear panel. Similarly, we introduced the Onion and Garlic variant for Realme X, and in April 2022, we introduced the Paper Tech design with our most premium flagship, Realme GT 2 Pro.
Gadgets 360: As people are now returning to offices/schools, is there any shift in buying patterns? Will there be a drop or increase in demand?
Madhav Sheth: Post the pandemic, we have seen several changes in the buying patterns of consumers. The buying cycle has gone up to 24 months on average from an earlier average of 16-18 months, and we expect the trend to continue throughout the rest of the year as well. Therefore, for smartphone makers, it is essential that they have a strong differentiating factor that makes their products stand out in the market.
Some responses have been edited slightly for clarity and length.
Realme India CEO Madhav Sheth joins Orbital, the Gadgets 360 podcast for an exclusive wide-ranging interview, as he talks about the 5G push, Make in India, Realme GT series and Book Slim, and how stores can improve their standing. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.