16 Feb 2016

New Delhi, 15^th February, 2015 – According to International Data Corporation’s (IDC) Quarterly Mobile Phone Tracker, 25.6 million smartphones were shipped in India in CY 2015 Q4 – up 15.4 percent from 22.2 million units for the same period last year. But, similar to last year, smartphone shipments saw a sequential decline in the last quarter of the year. 2015 Q4 shipments dipped 11.9 percent over previous quarter owing to weaker shipments from key Indian players. However, full calendar year 2015 grew 28.8 percent to 103.6 million units, positioning India as one of the fastest growing smartphone market in Asia Pacific.

According to Karthik J , Senior Market Analyst, Client Devices “The online share of smartphone shipments continued to ramp further as 2015 Q4 saw online mega sales from major e-tailers like Flipkart, Snapdeal and Amazon. Online share spiked to 37.3 percent in 2015 Q4, growing 2.5 times over the same period last year with almost half of the contribution coming from online exclusive models”, adds Karthik .

As the smartphone market in China begins to slow down, most vendors including Chinese players are now looking for avenues to leverage on India’s growth potential. The online channel negates the need to set up a complex distribution network to reach target customers. Hence, it provides an easy medium for Chinese vendors to enter the Indian smartphone market. However, most of these vendors are also looking at expanding their offline presence to gain further share in the India market.

Figure 1

Jaipal Singh , Market Analyst, Client Devices says , Chinese vendor’s smartphone shipment spiked with 71 percent growth in 2015 Q4 over last year. Singh further adds that , “good quality, big discounts by e-tailers and higher specification at lower prices are few key factors for which Chinese smartphones are preferred over others especially in US$100-300 price band.”

The “Make in India” campaign continued to propel local manufacturing of smartphones in India. “Almost 1 in 2 smartphones shipped in 2015 Q4 were locally manufactured in India and we expect this to increase further as more vendors are likely to join this bandwagon to benefit from subsidies and be more price competitive”, says Singh . Amongst the locally manufactured handset, Samsung led with the highest shipments followed by the Home-grown vendors.

Similarly, 4G smartphones shipment spiked to 13.9 million units accounting for more than half of the market in 2015 Q4. Karthik further adds, “4G based smartphone shipments surpassed 3G volume for the first time during the last quarter of the year, primarily led by Samsung and Lenovo together accounting for more than half of 4G volumes”. Shipments from much awaited Reliance Jio started pouring in 2015 Q4, incrementally contributing to a fast growing LTE share in India.

Smartphone Vendor Highlights:

Figure 2

Samsung continued to lead the Indian smartphone market with marginal sequential growth but a higher share gain in 2015Q4 accounting for 26.8 percentage share of shipments. Samsung’s J–series led the show for the vendor contributing to over 2/3^rd of its total shipments. The On5 and On7 models strengthened Samsung’s online portfolio further, while the J5 and J7 were made available in offline channel as well.

Micromax maintained the second position with 14.1 percent share in 2015 Q4 but shipments fell 12.1 percent year-over-year and 23.5 percent over previous quarter. The vendor is facing tremendous competition from both home-grown and China-based vendors at different price points under US$200. Micromax’s 4G share of smartphones increased to 27 percent, leading the LTE shipments amongst Home-grown vendors.

Lenovo including Motorola pipped Intex to acquire the third position with a market share of 11.6 percent. Lenovo shipments almost tripled year-over-year in 2015 Q4 ending the year on a good note. The K3 Note continues to be the top selling model for Lenovo. Lenovo’s focus towards offline channels plus an array of new launches helped the vendor to drive its share upwards registering a healthy 10.8 percent sequential growth in shipments.

Intex fell to the fourth position, although shipments grew 40.9 percent in 2015 Q4 over the same period last year. The primary volume driver for Intex continues to come from 3G based devices in sub-US$100 segment. The vendor has limited portfolio of LTE based devices currently but is expected to launch a slew of 4G models in the coming quarters to gain share in this category.

Lava with a healthy 20 percent year-on-year growth continued to manage its place in the top five in highly cluttered Indian smartphone market. Lava gained share in the online channel mainly through 4G based shipments from their Xolo series. They are expected to strengthen their play in 4G through new product launches in the entry level segment.

IDC India Forecast

IDC expects the smartphone shipments to grow at double digit rates in CY 2016.The share of smartphones in the overall mobile phone market was around 40 percent in CY 2015 and given the current trend, smartphone sales would overtake feature phone sales in 2016. Also, we expect 2016 to be a year of affordable 4G smartphones. By end of 2016, we expect at least one in two smartphones shipped in India to be a 4G enabled device. According to Kiranjeet Kaur

Research Manager- Asia/Pacific Mobile Phones** ,

“Local manufacturing should further traction in 2016 as more and more vendors are willing to benefit from lower import duties and tax structures on Semi-Knocked Down units (SKD).” “This year could also be the beginning of Completely Knocked Down (CKD) manufacturing in India taking the local manufacturing to the next level”, **adds Kiranjeet