New strategic marketing opportunities as smartphone ownership surges in India

WARC, 28 February 2014

NEW DELHI: Indian consumers are rapidly moving away from feature phones to smartphones as local brands enter the market and as the price gap narrows.

Latest figures from the International Data Corporation (IDC) show that during 2013 the share of the mobile user base taken by smartphones rose from just 10% in the first quarter to 22% in the fourth quarter.

In terms of actual numbers, some 44m smartphones were shipped in 2013, a 71% rise on the previous year's figure of 16.2m. The total phone market had grown more slowly, at 18%, to 257m units.

Within the smartphone segment, phablets – devices with a screen size between five and just under seven inches – were taking an increasing share which stood at around 20% in the fourth quarter.

"The growth in the smartphone market is being propelled by the launch of low-end, cost-competitive devices by international and local vendors which are narrowing the price gaps that exist between feature phones and smartphones ," said Manasi Yadav, a senior market analyst with IDC India.

Smaller Indian vendors, such as LAVA, Intex were reported to have shown "tremendous growth" in the second half of the year. Indeed, Q4 figures indicated that the smartphone market had grown 181% year on year.

Kiran Kumar, Research Manager with IDC India, observed that international vendors were also "striving to launch cost competitive devices that cater to every segment in the target audience".

IDC expected smartphone growth to outpace the overall handset market for the foreseeable future. The Guardian recently reported a forecast from research company Mediacells, which suggested that 225m smartphones would be sold in India in 2014 with the largest proportion going to new users.

Samsung and Nokia were the top international brands in the overall market, according to IDC, with Micromax, Karbonn and Lava the leading domestic brands. The latter three were also prominent in the smartphone market, where Samsung and Sony were the preferred international brands.

Low-end Galaxy phones accounted for 50% of Samsung's shipment volumes and had helped it gain a market-leading 38% share in smartphones. In contrast, Sony's share was just 5%.

Micromax was in second spot with a 16% share, followed by Karbonn on 10%, while Lava was close behind Sony on 4.7%.

Data sourced from IDC, Guardian; additional content by Warc staff

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