Xiaomi, Samsung now command half of Indian smartphone market

By Anuj Sharma - October 28, 2017
xiaomi
Indian handset shipments reached an all-time high of over 84 Million for the first time ever driven by strong sell-in of both featurephones and smartphones. Majority of growth was driven by Flipkart....

Strengthening presence in India, Xiaomi and Samsung together contributed to almost 45 per cent of the Indian smartphone market in the third quarter of 2017 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.

“Indian handset shipments reached an all-time high of over 84 Million for the first time ever driven by strong sell-in of both featurephones and smartphones. Majority of growth was driven by Flipkart’s Big Billion sale and Amazon’s Great Indian festival sales in September,” market research firm Counterpoint Research has said.

Offline players also contributed to some of the shipment growth filling the channel ahead of Diwali. As a result, fourth quarter will be crucial for offline players as they need to streamline their inventory levels which they have accumulated ahead of Diwali. Brands such as Xiaomi, Honor and Moto are still offering discounts even post Diwali.

Driven by pre-Diwali shipments, Indian mobile handset and smartphone market grew by six per cent and 18 per cent year-on-year driven by strong pre-Diwali shipments.

“India continues to be an attractive destination for handset OEMs. With strong smartphone growth and a sizeable featurephone market for at least three to four years, OEMs in India can target a diverse set of audiences. This has allowed a number of OEM’s to still realize double digit growth in the featurephone segment in spite of being absent in the smartphone segment,” said Karn Chauhan, Research Analyst at Counterpoint Research.

Driven by sub-USD15 (Rs 1,000) devices as well as entry of Jiophone and Nokia branded phones in the market during the quarter, feature phone segment declined four per cent year-on-year but grew 22 per cent quarter-on-quarter.

Chinese brands performance remained strong and contributed to more than half of the total smartphone shipments. It is their 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 quarter-on-quarter 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 & OnePlus were the fastest growing smartphone brands during the quarter.

Reliance’s Jio 4G LTE network served as a disruptor in telecom space which drove an inflection point for mobile data consumption as well as demand for 4G capable phones. 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.

This has changed the dynamic of the Indian mobile market where OEMs and operators are partnering to launch affordable 4G bundled offerings. It will all boil down to how attractive the bundled value proposition is, keeping in mind the effectiveness of total cost of ownership.

With nine per cent market share, Vivo stood third, Oppo with eight per cent market share was fourth and Lenovo-including Motorola with seven per cent market share stood fifth in the third quarter of 2017.

Three out of four mobile handsets shipped were “Made in India” during the third quarter of 2017. As the number of assembly units has crossed the 100 factories landmark, government through its phased manufacturing programme will look forward to an increased contribution of mobile ecosystem players to increase local value addition currently pegged at a low 5.6 per cent. For this, introduction of SMT lines by players will be crucial in the short term, further catalysing the growth of number of factories and component ecosystem.

LTE capable smartphones contributed to 97 per cent of smartphone shipments in the third quarter of 2017. However, in terms of installed base almost 40 per cent smartphones are still only 3G or 2G capable signaling a faster upgrade cycle. 

Affordable mid end segment (Rs 10,000 – Rs 15,000 or US$150-$230) was the fastest growing segment driven by strong performance of Xiaomi, the Chinese vendor, contributing to almost half of the shipments.

Owing to strong performance of Apple, OnePlus and Samsung, premium segment (above Rs 30,000, US$465) grew record three times year-on-year.

Driven by Chinese brands as they continue to be the key reason for growth, Qualcomm powered smartphones grew a healthy 73 per cent year-on-year in the third quarter of 2017.

 

 

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