MARKETING

India Smartphone Business has Growth Potential, but Market Conditions are More Competitive

Smartphones to Represent 62 Percent of all Mobile Phone Sales in India in 2018

Current Scenario: As the Indian cellular market goes through consolidation and aggressive 4G roll out, demand for smartphones will continue to grow. With smartphone penetration maturing in many developed markets (see Table 1), continued growth in the world’s third largest smartphone market makes India an attractive market to device manufacturers. Smartphones in India are expected to account for 62 percent of all mobile phones sales in India in 2018.

Analyst Take: “With the slowdown in sales in major markets, including the U.S., China and mature Western Europe, India represents the largest opportunity because it is the second-largest mobile phone market after China,” said Anshul Gupta, research director at Gartner.

In addition, demonetization in India through the elimination of 500 and 1,000 rupee notes caused an increased push from the government for digital currency, as well as people becoming more open to using digital payment methods. The rise of digital currency is bringing a new use case for smartphones, which, in turn, is set to trigger higher demands for smartphones. This opens the opportunity for service providers to launch mobile wallet solution or even vendors to launch their exclusive mobile payment solutions like Android Pay or Apple Pay to build an ecosystem.

Leading global vendors, Samsung and Apple, have made exclusive plans to grow their shares in the market. Major Chinese manufacturers, such as Gionee, Huawei, Oppo, BBK (Vivo), Xiaomi, Lenovo etc., have committed big investments to exploit the growth opportunity.

Ever rising competition from Chinese manufacturers has not only troubled top local brands such as Micromax, Intex, Lava and Karbon mobile but also resulted in a decrease in smartphone market share for Samsung in India (see Table 2).

“With an exclusive focus on the market from the device manufacturers, we expect more customized smartphones to come to market and remain key to win in this highly competitive market,” said Mr. Gupta.

As opposed to earlier falling mobile phone average selling price (ASP) trends led by the rush to low cost mobile phone, Gartner has noted a change in consumer spending. Our recently concluded consumer survey showed, users are willing to spend more to get a smartphone with better features than simply rushing for lowest price smartphones.

“The growing ASP trend will be maintained in the coming years with the increasing middle class population and rising per capita income leading to more disposable income to be spent on electronic goods,” Mr. Gupta said.

Read 641 times Last modified on Wednesday, 03 May 2017 03:41
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