Indian smartphone market booms

Counterpoint Research and Cybermedia Research highlight premiumisation trend and 5G adoption as key growth drivers.

May 10, 2024

For the first time in the March quarter, Vivo claimed the top spot in shipment volume, while Samsung led in revenue

Xiaomi sees an impressive 28% surge in volumes, pushing Samsung to third position in market share

Budget 5G handsets priced between INR 10,000-15,000 experience a whopping 400% shipment growth

Industry analysts predict tough competition in the budget-friendly segment, emphasizing the need for affordable 5G and strong AI features for brands to succeed

The Indian smartphone market witnessed a solid 8-10% year-on-year growth in shipment volumes during the first quarter of 2024 and is projected to continue growing at a high single-digit rate throughout the year. According to market analysts from Counterpoint Research and Cybermedia Research, this growth is primarily fueled by the increasing trend towards premiumisation and the widespread adoption of 5G technology.

Counterpoint reported an 8% increase in volume shipments during the quarter ending in March, accompanied by a notable 18% surge in revenue. However, sales fell short of expectations due to reduced foot traffic in retail outlets and some consumers tightening their purse strings, even though improved inventory levels allowed brands to introduce multiple new products.

On the other hand, Cybermedia Research (CMR) indicated a 10% year-on-year growth in the market during Q1 2024, with shipments of 5G-enabled devices skyrocketing by 70%. This was particularly driven by affordable 5G handsets priced between INR 10,000 and 15,000, which saw a staggering 400% growth compared to the previous year.

Regarding market leadership, Vivo claimed the top spot for the first time in the March quarter, capturing a 19% share of the shipment volume, while Samsung remained ahead in revenue. Xiaomi secured the second position, experiencing a noteworthy 28% surge in volumes during the quarter, which propelled it to an 18.8% market share, pushing Samsung to third place.

According to CMR’s perspective, Samsung maintained its lead in terms of shipment volumes with a 19% market share, closely followed by Xiaomi and Vivo, both with 19% and 16% shares respectively. Oppo and Realme rounded out the top five with 10% each.

CMR anticipates a further 7-8% year-on-year growth for the smartphone market in 2024. The research firm highlighted a significant 16% year-on-year growth in the budget segment (devices under INR 7,000) during the March quarter, marking a reversal from previous declining trends.

Counterpoint emphasised Samsung’s dominance in revenue share despite ranking third in volume shipments, attributing this to higher average selling prices, which reached US$ 425 for the brand. Meanwhile, Apple enjoyed a record-breaking quarter, leading the premium segment (handsets priced above INR 30,000) in value and volume, driven by strong sales of the iPhone 15 through offline channels.

The premium segment accounted for 20% of the total market volume and commanded 51% of total revenue during the quarter, marking a significant shift. Offline sales also saw a resurgence, capturing 64% of the market share, indicating the highest quarterly growth since the onset of the COVID-19 pandemic.

According to experts, the trend towards premiumisation is causing consumers to upgrade to higher-value smartphones across different price segments, leading to growth in the smartphone market. They noted that over a third of consumers using mid-tier devices are eager to transition to the premium segment. Looking ahead to 2024 and beyond, experts predict intense competition in the value-for-money 5G segment of the smartphone market. They emphasised that brands that leverage affordable 5G technology, robust on-device AI capabilities, and seamless cross-device experiences will have a significant advantage in this increasingly competitive landscape.

Source: Economic Times

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