New Delhi, 3^rd March, 2016 – According to International Data Corporation’s (IDC) Monthly City Level Smartphone Tracker, the leading 30 cities of India make up approximately 51% of the entire smartphone market in Q4 CY 2015 ; New Delhi generating the maximum demand, closely followed by Mumbai. With increasing appeal and penetration of the smartphones in smaller cities and towns, the tier 2 & 3 cities and beyond are expected to constitute a significant portion of the Indian smartphone market in the near future.

According to Jaideep Mehta, Managing Director, IDC South Asia

"With increasing data penetration and enhanced reach of e-commerce, the smartphone consumers in Tier 2&3 cities is becoming more aware and demanding. They want a smartphone with latest the features & specifications, affordable prices, and convenient buying options”. He further added, “The coming 4G revolution is promising to trigger the next wave of smartphone growth with 4G enabled devices already overtaking 3G devices as the largest smartphone category.”

25 major Tier 2 & 3 cities of India currently make up around 21.3% of Indian smartphone market. Majority of the demand from these cities is for 3G models, but with increasing 4G smartphone model portfolio across all brands and expanding 4G network footprint by Airtel, Vodafone, soon to be launched Reliance Jio, the demand for 4G smartphones is expected to grow exponentially.

"There is a clear trend of migration from feature phones to low end smartphones in smaller cities and towns, making these markets the next growth engine for the smartphone industry. With the first time mobile phone users coming on a smartphone, it will be their only connected device which meets all of their internet and entertainment needs” says Swapnil Bhatnagar,Research Director, IDC India .

Currently these cities are strongholds for Indian vendors with affordable smartphone models, making up more than 2/3^rd of the market for sub $100 smartphones in these cities.

“But Chinese vendors like Lenovo, Motorola & Xiaomi are gaining market share in these cities due to their superior positioning as quality brands, with a value for money proposition,” says Swapnil.

“Online channel is disrupting the traditional distribution channel by offering a compelling value proposition to the customers in terms of better price, convenience and product range. Flash sales and online exclusive smartphone models are a big hit with Indian consumers and these are being used as marketing tools for building excitement and hype,’ adds Navkendar Singh , Senior Research Manager, IDC India

“However, the Online/Offline price disparity continues to be a major concern for channel partners of most vendors across cities” says Singh.

Top 5 cities of India make up approx. 60.0% of the online smartphone sales in India. 4G devices make up around 45.0% of the market in these cities. Global vendors like Apple, Samsung & others hold more than 40.7% of the market in these cities.

Samsung remains at the top in leading 30 cities of India, in Q4 2015 across cities, driven by J-series and ON series (online only), holding 29.4% share within top 30 cities.

Micromax is at the 2^nd position overall in Q4 2015, capturing significant market in sub $100 but facing stiff competition from other Indian vendors in this price segment.

Lenovo + Motorola hold a strong 3rd position in Q4 2015 emerging as the most “value for money” brand led by “K3 Note”, “Vibe P1M” & “Moto G 3^rd gen” models. They have a unique channel strategy wherein the online exclusive models are made available offline after 3 months of launch. This helps the offline channel partners by capitalizing on the marketing investments already done at the time of launch through online.

Intex is at 4^th position in Q4 2015 in the top 30 cities, with a wide & affordable range of models under $100 price segment which is generating huge volumes for the channel partners with increased visibility and reach in tier 2 & 3 markets.

Lava stands at 5^th position in Q4 2015 with optimum price parity between Offline Vs Online channels

Apple regained the top position in above $300 smartphone market with 42.1% share with the launch of iPhone 6S & 6S plus in addition to the price correction for iPhone 5S, 6 and 6 Plus.

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