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Smart­phone ship­ments in In­dia grew at a healthy rate in Q1 2017

Electronics Bazaar - - Contents - By Baishakhi Dutta

Ac­cord­ing to the lat­est re­search from Coun­ter­point’s Mar­ket Mon­i­tor ser­vice, smart­phone ship­ments in In­dia grew a healthy 15 per cent an­nu­ally in Q1 2017, reach­ing 29 mil­lion units. The top five brands con­trib­uted to al­most 70 per cent of the to­tal smart­phone mar­ket. For the first time, Xiaomi jumped to the No. 2 spot while Sam­sung con­tin­ued to re­tain the top spot. Vivo, Oppo and Len­ovo (which in­cludes Mo­torola) made up the rest of the top five.

Com­ment­ing on the find­ings, Karn Chauhan, re­search an­a­lyst at Coun­ter­point Re­search said, “In­dia’s smart­phone mar­ket is wit­ness­ing a fo­cus shift in the dis­tri­bu­tion strat­egy by ma­jor brands. Off­line brands like Oppo, Vivo and Gionee have now started fo­cus­ing on on­line chan­nels as well, to gain ex­tra mar­ket share. On­line-only brands like Xiaomi and Mo­torola are mov­ing fast into off­line mar­kets to widen their reach to the mass mar­ket, ad­dress­ing con­sumers in Tier-2 and Tier-3 cities. While the Chi­nese smart­phone brands are adopt­ing mul­ti­ple chan­nel strate­gies to max­imise growth, an­other Chi­nese brand, iTel, has dis­rupted the fea­ture phone half of the mar­ket. It is now lever­ag­ing its suc­cess­ful low-cost strat­egy, ef­fec­tive dis­tri­bu­tion and scale to grow in the In­dia mar­ket.”

Shob­hit Sri­vas­tava, re­search an­a­lyst at Coun­ter­point Re­search, fur­ther added, “The ASP (av­er­age sell­ing price) of smart­phones in In­dia in­creased by ` 2,000 (US$ 31) dur­ing Q1 2017 as com­pared to Q1 2016. The rea­son for the in­crease in ASP is the grow­ing num­ber of users that are up­grad­ing to the high-end spec­i­fi­ca­tions of­fered by brands in the ` 8,000 (US$ 125) to ` 20,000 (US$ 310) price seg­ment. Smart­phone brands are play­ing on their strong points to mar­ket them­selves as leader in key cat­e­gories – such as Gionee with its ‘Bat­tery and selfie’ po­si­tion­ing, Oppo with its ‘Selfie ex­pert’ and Vivo with its ‘Cam­era and mu­sic’ prod­uct of­fer­ing.”

Mar­ket sum­mary:

Over­all, YoY growth for mo­bile hand­sets in Q1 2017 has been 6 per cent, and for the smart­phone seg­ment, growth over the same pe­riod has been 15 per cent.

Smart­phones and fea­ture phones con­trib­uted equally to the over­all mo­bile hand­set ship­ments in the quar­ter. LTE-ca­pa­ble smart­phones con­trib­uted 96 per cent of to­tal smart­phone ship­ments in Q1 2017. LTE is now a de­fault fea­ture for smart­phones in In­dia. Qual­comm-em­bed­ded smart­phones grew a healthy 64 per cent YoY dur­ing Q1 2017. The in­crease in mid-seg­ment smart­phone ship­ments drove this growth.

Eight out of 10 smart­phones shipped sup­ported a 12.7 cm or big­ger dis­play. Users are en­joy­ing con­tent on big­ger screens, while cut-throat com­pe­ti­tion be­tween tele­com op­er­a­tors is re­sult­ing in low cost 4G tar­iff plans. Voice-over-LTE (VoLTE) ca­pa­bil­ity in some net­works is help­ing to drive a new de­vice cat­e­gory called 4G fea­ture phones (some­times called ‘smart fea­ture phones’). These are pro­vid­ing a way for cur­rent fea­ture phone users to take ad­van­tage of low/no cost voice calls over the 4G LTE net­works. Lava was the first to launch a 4G fea­ture phone. Mi­cro­max, LYF and other brands plan to launch 4G fea­ture phones in the com­ing months. In­dian brands are ex­pand­ing to over­seas mar­kets for growth as they are los­ing their foot­ing in the home mar­ket. Al­most four out of five mo­bile phones shipped were made in In­dia dur­ing Q1 2017. The im­po­si­tion of the Goods and Ser­vices Tax (GST) will have an im­pact on do­mes­tic man­u­fac­tur­ing, and the govern­ment will need to con­tinue in­cen­tives for lo­cally man­u­fac­tured mo­bile phones to fur­ther push the do­mes­tic man­u­fac­tur­ing ecosys­tem.

The mid-end seg­ment (` 15,000` 20,000/US$ 230-US$ 310) wit­nessed the high­est growth of 158 per cent YoY dur­ing Q1 2017. Most of the growth was driven by Sam­sung, Oppo, Vivo, Gionee and Mo­torola.

The pre­mium seg­ment (>` 30,000, US$ 465) grew a healthy 35 per cent YoY. Sam­sung re­tained the top po­si­tion with 48 per cent mar­ket share, fol­lowed closely by Ap­ple at 43 per cent mar­ket share. OnePlus, Oppo and Google made it to the top five in this seg­ment, but each with mar­ginal shares. In­te­gra­tion of high-qual­ity (8 megapixel and above) selfie-fo­cused cam­eras in smart­phones is one of the fastest grow­ing trends, though cur­rently it’s merely a sup­ply side push. Sales of de­vices fo­cused on self­ies grew an­nu­ally by 9 per cent in Q1 2017. This seg­ment was mainly driven by Sam­sung, Oppo, Vivo, Len­ovo and Gionee.

(Source: Coun­ter­point Tech­nol­ogy

Mar­ket Re­search press re­lease)

Fig. 3: Mar­ket share of selfie-fo­cused smart­phone brands, Q1 2017

Fig. 2: In­dia smart­phone growth by price band and rank­ings Q1 2017

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