Finally, India Is Scaling Up In Smartphone Segment

It’s official now. India is getting upscale, as far as handsets are concerned. For the first time in the country’s history, feature phone sales fell 0.8% to 51.8 million units in July-September quarter this year, a report released by CyberMedia Research (CMR) said. In sharp contrast, smartphone sales jumped 152.3% year on year and reached 11.1 million units for the quarter. Overall handset shipments grew 10.9% and crossed 62.9 million units, out of which 19.5 million units were shipped in September alone.

However, it is the meteoric rise of smartphones in India that turns out to be most encouraging. “We have been saying that the way forward is smartphones. July-September 2013 is the first quarter to actually report this trend in numbers. This means vendors can expect to see large opportunities in the upgrades market where many feature phone users will upgrade to smartphones,” Faisal Kawoosa, lead analyst at CMR Telecoms Practice, said in a statement.

There is a chance that new smartphone purchases may register lower volumes vis-à-vis upgrades but this phenomenon could be a few quarters away, according to Kawoosa.

“So there is going to be a huge opportunity, as well as competition, in the entry-to-mid-level smartphone segments where the volumes would remain for a while,” he added.

Going by the current trends, there is more heartening news for homegrown players. In the smartphone segment, Samsung was the category leader (33.9%) for this quarter, followed by local vendors Micromax (19.7%) and Karbonn (9.5%). Combined, the top 3 vendors made up nearly 63.1% of the total smartphone shipments. Also, smartphones accounted for 17.6% of the total mobile handset shipments during the quarter.

“One interesting observation is that local handset brands have now close to 47% market share in the Indian smartphone market and this momentum has been a source of confidence to a couple of players to enter new geographies outside India where the smartphone market is on the rise,” said Tarun Pathak, an analyst at CMR Telecoms Practice.

“The Indian market for smartphones continues to be a competitive space with close two brands vying with each other. Going forward, we expect this segment to be even more competitive as we expect some of the China-based ODM partners entering directly into the India market during the first half of 2014,” he added.

CMR also expects 3G smartphone shipments to rise and expects to see some smartphone vendors introduce 4G-enabled devices by the end of 2013.

Disclaimer: CMR uses the term ‘shipments’ to describe the number of handsets leaving the factory premises for original equipment manufacturer (OEM) sales or stocking by distributors and retailers. In the case of handsets imported into the country, it represents the number leaving the first warehouse to OEMs, distributors and retailers. Also, CMR does not track the number of handsets brought on their person by individual passengers landing on Indian soil from overseas destinations or ‘grey market’ handsets.