Made in India smartphone shipments decline by 8% as consumer demand declines: Counterpoint

• The shipments of “Made in India” smartphones have declined by 8% in Q3 2022.
• The shipments have primarily declined due to a decline in consumer demand amid negative macroeconomic indicators.
• Oppo, Samsung, and Vivo top the list in shipments of “Made in India” smartphones.

In a first this year, “Made in India” smartphone shipments reported a decline in Q3 (July to September) 2022. According to a report by Counterpoint Research, domestic shipments of smartphones reported a decline of 8% in Q3 2022 on a year-on-year basis.

The domestic shipments of smartphones declined to 52 million units in Q3 2022. The decline has been attributed to a decrease in consumer demand due to economic headwinds and geopolitical market uncertainties, such as the ongoing Russia-Ukraine war.
Reasons for decline
“The Made in India smartphone shipments declined in Q3 2022 as compared to Q3 2021. Two major forces impacted the growth of such smartphone shipments,” said Prachir Singh, senior analyst of Counterpoint Research.

The primary reason Singh gives is the decline in consumer demand, especially in the entry-level segment, due to adverse macroeconomic indicators. The second reason was the remaining inventory at the start of the quarter, which impacted manufacturing.
Oppo continues to dominate
Chinese smartphone maker Oppo continues to dominate the shipments of domestically produced smartphones. The company’s share in domestic shipments has increased from 20% in Q3 2021 to 23.8% in Q3 2022.

It is to be noted that Oppo’s shipments include OnePlus, Realme, and Oppo smartphones, as the company manufactures smartphones for all three companies in India.
Samsung takes the second spot
Samsung, which sells smartphones across various segments, occupies the second spot with a 20.7% share in domestic shipments in Q3 2022, up from 16.3% in Q3 2021.

In addition, Dixon Technologies, which manufactures smartphones for Samsung, is in the fifth position with a share of 7.8%.
Outlook remains positive
Despite the decline, the future looks bright as the country’s manufacturing ecosystem continues to grow, as 63% of shipments have come from in-house manufacturers while the share of electronics manufacturing services (EMS) companies has been limited to 37%. This includes 8.5% held by Bharat FIH, which manufactures smartphones for Xiaomi, and 7.8% share held by Dixon Technologies, which manufactures smartphones for Samsung.

Singh also expects an uptick in local production due to the Indian government’s production-linked incentive (PLI) scheme and partnerships between Indian and foreign companies.

“Further, we will continue to see PLI disbursements in subsequent quarters, which will add to the local manufacturing landscape. Overall, the manufacturing trend is witnessing an upward trajectory with multiple partnerships happening in recent months, like the ones between Tata Group and Wistron and between Foxconn and Vedanta,” said Singh.

In addition, the Indian government is also working on increasing the local value addition in the smartphone industry.

“The government is actively pursuing the target of expanding the local value addition from the present 17-18% to 25% in the near future,” said Priya Joseph, research analyst, Counterpoint.

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