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India: Second Largest Smartphone Market

The US is now the third largest smartphone market in the world, according to a new report by global technology market analyst firm Canalys. The number of smartphone shipments to India grew 23 percent in the third quarter of this year, reaching just over 40 million units shipped. That makes India the second largest smartphone market, just behind number one China. Sorry, US, but you’re in third place now.

The brands selling the most in India? Samsung and Xiaomi, which sent 9.4 million and 9.2 million smartphones to India, respectively, account for almost half of the entire Indian smartphone market in the country. “This growth comes as a relief to the smartphone industry. Doubts about India’s market potential are clearly dispelled by this result,” said Canalys’ Ishan Dutt. “There are close to 100 mobile device brands sold in India, with more vendors arriving every quarter. In addition, India has one of the most complex channel landscapes, but with low barriers to entry. Growth will continue. Low smartphone penetration and the explosion of LTE are the main drivers.”

The top five vendors in India, including Samsung, Xiaomi, Vivo, Oppo and Lenovo, account for 75 percent of the total shipments in India, according to the report. While Samsung is a top seller, Canalys Analyst Rushabh Doshi believes that inexpensive smartphone maker Xiaomi will soon over take the Korean company “within a couple of quarters.” Still, it’s not just low-end phones making inroads in the country. Apple only started local production in India this year, and iPhone shipments have more than doubled to 900,000 units in the third quarter.

Samsung and Xiaomi together contributed to almost 45 per cent of the smartphone market in India in the third quarter of this year as the market grew 37 per cent (quarter on quarter) and 18 per cent (year on year), temporarily surpassing the US for the first time ever.

According to the latest research from Counterpoint’s ‘Market Monitor service’, India handset shipments reached an all-time high of over 84 million for the first time ever, driven by strong sale of both feature phones and smartphones.

India Smartphone Market

“This is the first time since 2012 that Samsung and Xiaomi have reached this level of combined share. Additionally, the quarter was marked with return to growth for local handset players such as Micromax and Lava in the smartphone segment,” said Karn Chauhan, Research Analyst at Counterpoint Research.

Chinese brands performance remained strong and contributed to more than half of the total smartphone shipments.

It is the third consecutive quarter when their market share is well over 50 per cent after they took over local players in the second half of 2016.

However, local brands like Micromax and Lava grew 41 per cent and 24 per cent (QoQ), respectively, in the smartphone segment recovering from their all-time low during demonetisation last year.

Micromax Bharat 2 was the bestselling model in the sub $75 segment.

Xiaomi, iTel, Oppo, Vivo Aand OnePlus were the fastest growing smartphone brands during the third quarter driven by festive sales.

Featurephone segment declined 4 per cent (YoY) but grew 22 per cent (QoQ) driven by sub-Rs 1,000 devices as well as the entry of Jiophone and Nokia branded phones in the market during the quarter.

“It has been almost a year since Reliance Jio launched its 4G LTE network officially, which drove an inflection point for mobile data consumption as well as demand for 4G capable phones,” said Shobhit Srivastava, Research Analyst at Counterpoint.

Within a year, Jio attracted more than 100 million subscribers to its network and now is targeting the next 100 million subscribers by bringing the first ever LTE featurephone to the market.

Three out of four mobile handsets shipped were “Made in India” during the third quarter.

Affordable mid-end segment (Rs 10,000-Rs 15,000) was the fastest growing segment driven by strong performance of Xiaomi which contributed to almost half of the shipments.

“Three out of the top five best-selling smartphones in India were from Xiaomi alone. Xiaomi has been popular in the past for its value for money offerings,” said Counterpoint Associate Director Tarun Pathak.

Premium segment (above Rs 30,000) grew record three times (YoY) during the third quarter owing to the strong performance of Apple, OnePlus and Samsung.

Qualcomm was the leader among smartphone chipset suppliers.

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