Indians increasingly opting for premium smartphones including 5G-enabled, shipments data reveals

Indians are increasingly opting for premium smartphones, attributable to the need to keep up with new technology upgrades such as 5G, coupled with a steady rise in purchasing power.

Smartphone makers in India have shipped about 69 million smartphones in the first half of 2024, with a 7.2% yearly growth, according to the International Data Corporation's (IDC) Worldwide Quarterly Mobile Phone Tracker report. In the second quarter of 2024, the smartphone makers shipped 35 million smartphones, with a growth of 3.2%.

Although it is the fourth consecutive quarter of yearly shipment growth, muted consumer demand and rising device costs continue to restrict swift shipment recovery, International Data Corporation (IDC), a global market intelligence and advisory services provider, said on Tuesday.

The average selling price of smartphones grew by 2.8% during April-June; however, they declined by 5.6% from the January-March quarter to $248.

"Apart from old inventory clearance in the first half of the quarter, vendors also started to launch new smartphones, especially in the mid-premium/premium segment (mostly China-based vendors) from mid-quarter onwards, for monsoon sales in July and August," said Upasana Joshi, Senior Research Manager, Devices Research, IDC India.

The entry-level smartphones, costing around $100, witnessed a strong decline of 36% year-on-year to a 14% share, down from 22% a year ago.

Shipments of budget smartphones, costing between $100 and $200, grew by 8 % year-on-year, with a marginal increase in share to 44% from 42%. The top three brands were Xiaomi, Realme and Vivo, making up 60% of this segment, the IDC tracker showed.

The share of smartphones costing $200 to $400 reached 30%, up from 22% and registered the highest growth of 42% year-on-year. Oppo, vivo and Samsung gained a significant share compared to the previous quarter, making up almost 60% of this segment.

The phones costing $400 to $600 declined by 25% to a 4% share, down from 5% a year ago. According to IDC, Vivo was the major gainer, led with a 25% share, followed by OnePlus and Oppo.

The premium segment costing $600 to $800 held a 2% share and declined by 37%. Key models, according to the IDC tracker were the iPhone 13, Galaxy S23FE, iPhone 12 and OnePlus12. Apple's share increased year-on-year to 61%, while Samsung's share increased to 24%.

The super-premium segment, phones costing over $800, continued with 22 % growth and its share went up from 6% to 7%. The iPhone15/15 Plus/14/14 Plus together accounted for 77% of shipments, followed by the Galaxy S24/S24 Ultra with an 11% share, IDC said.

Notably, among the 27 million 5G smartphones that were shipped in the April-June quarter, the share of 5G smartphone shipments increased to 77%, up from 49% in the second quarter of 2023, mostly due to increasing affordability.

Among other findings, IDC said shipments to online channels grew by 8% year-on-year, and its share increased to 50% in April-June 2024 compared to 47% last year. Due to severe heatwave conditions in major parts of India, offline channel shipments declined by 2 during the April-June period.

"The premiumization trend in the smartphone market, led by Apple and Samsung, coupled with rising device costs is motivating China-based brands to expand beyond the mass segment. The entry-premium segment ($200 to $400) is expected to see healthy growth, while the entry-level (up to $100) will remain challenged at least this year, despite efforts around launching affordable 5G smartphones," said Navkendar Singh, Associate Vice President, Devices Research, IDC.

"Also, the marketing around GenAI smartphones will be more pronounced, amid heavy promotional activities around it," added Navkendar Singh.