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Acer decides to pull out of India's smartphone market, at least for now

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After entering India’s smartphone market in 2010, things have now significantly changed for Acer. Although it initially saw its fair share of success, the company’s recent struggles in the world’s fastest growing market  have now led to the announcement that it will halt smartphone sales in India, reports Business Standard.

Acer India managing director Harish Kohli confirmed the move, though the executive placed part of the blame on changes made to the country’s “Make in India” government initiative. Piloted by Prime Minister of India Narendra Modi, Make in India encourages manufacturers to set up shop in India instead of elsewhere.

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“We decided to come back [with smartphones] last year. However, [with] the change in government policies of Make in India and other aspects, our realization has been that it is too much of a market which is left to the smaller brands rather than any larger brands trying to enter at this particular stage,” said Kohli.

These “other aspects” include Acer trying to offer quality products at the lowest prices, as well as other smartphone manufacturers focusing primarily on price at the expense of quality, at least from Acer’s perspective.

“Today, mobiles have become a commodity from a price-point basis, rather than an experience basis. There are very few products based on experience,” said Kohli. “When you are into that kind of a space, it is a decision you need to take, whether to produce a quality product and bleed or just copy others and make a product for that particular price point.”

According to analysts, however, there were other reasons behind Acer’s exit from India’s smartphone market. Acer reportedly did not scale the distribution of its smartphones in the country. Furthermore, Acer did not follow other manufacturers’ lead by holding online flash sales, a tactic used by the likes of Xiaomi and OnePlus to sell as many handsets during a set period of time as possible by slashing prices. As a result, Acer only sold around 30,000 smartphones in 2016, in contrast to the three million Xiaomi sold between July and September.

The impact of this decision is not just contained to India — Acer’s 0.04 percent market share in the global smartphone market will likely take a hit, making it harder for the company to make its smartphone brand sufficiently visible.