Smartphone sales up sharply in India

Warc, 19 August 2014

NEW DELHI: India's smartphone market continues to grow rapidly as low price models attract new consumers and accelerate the migration from feature phones.

Latest figures from market research firm International Data Corporation (IDC) show that the smartphone market grew by 84% year-on-year during the second quarter, rising from just over 10m to 18.4m.

Most of this growth came in the sub-$200 category, which contributed 81% of the total. IDC noted that the low-end segment was set to grow even faster thanks to an influx of Chinese vendors and Mozilla's plans to enter the smartphone category at the $50 level.

Currently, feature phones account for 71% of volume sales and the speed of the shift towards smartphones is evident from the change in just one year – feature phones took 84% of sales in the second quarter of 2013.

Prime minister Narendra Modi will likely have given the sector a boost with a declaration in his Independence Day speech that digitisation of the country needed to become a reality and one that empowered every citizen.

"Digital India is not an elite concept anymore," he stated. "We have to take broadband connectivity to every village. We have to use this idea to revolutionise health and education."

IDC anticipated high growth in the smartphone market in the coming quarters due to the festive season and projected consumer buying rates. Kiran Kumar Research Manager, Client Devices, IDC India, forecast that the smartphone market would more than double between now and 2018.

"The user expectations are simple i.e. best-in-class user experience at affordable prices," he said.

Samsung is the market leader, with a 29% share, followed by several Indian brands – including Micromax (18%), Karbonn (8%) and Lava (6%) –which are targeting entry-level price points.

"These devices are not equipped with high end specifications and RAM is typically 256 MB," said Karan Thakkar, senior market analyst at IDC India. "This ultra low cost segment may not sound a viable option to the repeat buyers, but it works well on the targeted segment."

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