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Micromax is struggling dogmatically in the higher end of the smart phone market

Micro max, which has become India's No. 2 smart phone brand just five years after selling its first handset a $30 made in China model, is looking to go up market and overseas. The unlisted company sold 6.8 million phones in the July-September quarter including 2.2 million smart phones, and is on track to surpass $1 billion in sales in the fiscal year ending in March. With heavy advertising and phones based on Google Inc's Android software starting at $50 almost half the price of a comparable Samsung model Micro max has brought smart phones to the masses in a price-sensitive market where basic handsets still dominate.

In January, it will begin selling phones in Russia, followed by Romania, where competitors also include Samsung and Nokia. UK-based Fly also sells China-made phones in Russia and Eastern Europe. Micro max has also tried to tap the Brazilian and the Middle Eastern markets with basic phones, but did not manage to build scale and closed the operations. Industry watchers say Micro max, which is backed by private equity firms TA Associates and Sequoia Capital, has its work cut out pushing into pricier segments dominated by global brands and building its brand from scratch in new markets.

Among all types of phones, Micro max ranks third in India after Nokia and Samsung Electronics. The company, which started out selling IT software and telecoms gear, entered the handset market with cheap phones featuring bigger screens, and the capability to use two SIM cards so customers can take advantage of bargains from competing carriers a feature Nokia was slow to match. Now Micro max is looking to broaden its market by wooing brand-conscious Indians with more spending power. 

In October, it rolled out a 19,000-rupee "phablet" with a 5-inch screen promoted by "Wolverine" star Hugh Jackman an unusual choice in a country where Bolly wood actors and cricket stars are the preferred brand ambassadors. "Operators worldwide are already flooded with choices from other low-cost Asian Android smart phone players," said Neil Mawston, a UK-based executive director at Strategy Analytics. As mobile Internet prices in India have started falling, the smart phone market has taken off, with Micromax and other local vendors of low-cost China and Taiwan-made phones such as Karbonn and LAVA pushing hard into small towns.