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