Is the worst over for smartphone sales in India?
Pandemic lockdowns and remote work sparked a scramble for smartphones in India, a tide that ebbed as the world returned to normal. After a two-year slump that followed, sales appear to have turned the corner in the March quarter, promising cheer for phone makers in the world’s second-largest smartphone market.
Smartphone shipments in the March quarter rose 5% from a year earlier to 32.5-35 million units, data gathered from four industry analysts showed.
Smartphone sales peaked in the March quarter of 2021 with 38 million units, according to data from International Data Corp. (IDC) India. Shipments have fallen since then, dropping 3% year-on-year in Q1 of 2022 and a further 16% in Q1 of 2023.
“We’re expecting to see smartphone shipments (for the March quarter) to be anywhere between 33 and 35 million, which signals a good, healthy start to the year. This growth is coming despite the fact that average selling prices have not reduced in the past three years,” said Upasana Joshi, research manager at IDC India.
A revival is critical for Samsung, Xiaomi and Vivo, which collectively sold devices worth about $38.8 billion in India last year. This figure has remained stagnant since 2021, when it grew nearly 29% to hit $38.4 billion. In 2022, both value and volume of the overall smartphone industry declined.
Industry experts said that while the resilience of the value
of the India smartphone market is a good sign, this cannot sustain in the long run—thereby making a revival of consumer demand leading to higher shipments critical for the country’s most popular brands.
To be sure, these estimates are based on preliminary market data. Detailed reports from Counterpoint India and IDC India are expected in the next three weeks.
Xiaomi, which led India’s smartphone market for five years until the September quarter of 2022, is using the momentum to change its product strategy. “Our Redmi Note 13 series of affordable smartphones generated ₹2,000 crore in revenue within just one month of launch in this quarter. The nationwide 5G rollout and our premiumization push has stimulated demand,” a company spokesperson said. “We are also expanding our ecosystem offerings and expect a significant increase in average selling prices through this year.”
Samsung, India’s top smartphone brand by market share at the end of 2023, declined to comment.
Although the increase is modest, it comes as good news for phone makers, since device prices have gone up, fetching more sales revenue.
“Consumers are likely showing signs of adapting to the new market norms, where buyers are spending around $250 (₹21,000) for a device, as against $150 (₹13,000) from around fiveodd years ago,” Joshi of IDC India said.
For instance, although shipment volume in Q1 2024 was similar to that of Q1 2020, the average selling price has risen to $255 (₹21,000) from $199 (₹16,000). Consequently, the first quarter of 2024 generated about $8.3 billion in market value, a 28% increase in four years, which analysts consider significant amid weak consumer sentiment.