India's smartphone market grew by a nominal 1% in 2023, shows IDC data

The market grew 11% year-on-year in second half of CY23, compensating for the sharp 10% decline in the first half

India’s domestic smartphone market grew by a nominal 1 per cent in calendar year 2023, due to consumer demand remaining stressed, according to the latest report of IDC released on Tuesday. The only good news is that the market grew by 11 per cent year-on-year in H2CY23, compensating for the sharp 10 per cent decline in the first half. The country also shipped 146 million smartphones in 2023.

In Q4CY23 the market grew by 26% Y-o-Y with shipments of 37 million units, as the second half of the quarter saw stronger than expected shipments with several new model launches.
 

But the IDC report projects challenges in 2024. “The road to recovery for smartphones in 2024 looks strained and elongated, as worries around income, inflationary stress, price increases, and inventories remain,” says Navkendar Singh, associate vice-president, client device research, at IDC. He added that special efforts have to be made, especially at entry-level points, to fuel organic growth. The research company estimates a flat to low single digit annual growth in 2024, primarily led by upgraders in the $200- $400 smartphone segment, backed by financing schemes.  
 

There were, however, some discernible trends in 2023, and one of them augurs well for the transition of consumers to 5G. As many as 79 million 5G smartphones were shipped in 2023, with a plethora of launches in the mass budget segment. The average sale price (ASP) of 5G phones dropped to $374, a decline of 5 per cent YoY in 2023. Within the 5G smartphone shipments, the share of the budget ($100- S200) segment increased to 35 per cent from 22 per cent a year ago, while the entry-premium ($200-$400) segment continued to dominate with a 38 per cent share, although it was down from 49 per cent in 2022. 
 

Apple’s iPhone 13 and 14 (Apple sold over 9 million phones in 2023) , Samsung’s Galaxy A14, Vivo’s T2x and Xiaomi’s Redmi12 were the highest shipped 5G models in 2023.
 

The report also stated that shipments to online channels, once the most attractive way to sell smartphones, dropped by 6 per cent and its share went down to 49 per cent in 2023 from 53 per cent in 2022. 
 

On the other hand, offline channel shipments grew by 8 per cent YoY as vendors strengthened their retail presence with lucrative premium offerings as well as by expanding into smaller towns and cities.
 

Again, while most of the premium smart phone segments were doing extremely well, the worry was the decline in the mass segment which is where the bulk of phones are sold. So the entry level (sub-$100) segment grew by 12 per cent YoY and the share grew to 20 per cent, up from 18 per cent a year ago. But shipments to the mass budget ($100-$200) segment declined, with its share dropping to 44 per cent from 51 per cent. 

Even the entry premium ($200-$400) segment remained flat, with 21 per cent share, the mid-premium segment ($400-$600) reached a share of 5 per cent, growing by 27 per cent YoY. The premium segment ($600-$800) hit a 3 per cent share, growing by 23 per cent. But it is the super-premium segment ($800+) which registered the highest growth of 86 per cent, with its share going up from 4 per cent to 7 per cent.

Another trend of note is that foldable phones seem to have caught the fancy of consumers. Almost a million foldable phones were shipped, with the ASP declining by 4 per cent to $1,236. Samsung led the foldable phone market, although its share dropped to 73 per cent in 2023 as other players such as Motorola, Tecno, OnePlus and OPPO have entered India’s foldable market.

The report also pointed out that the Taiwanese mobile chip design company Media Tek increased its share vis-a-vis its competitor Qualcomm to 50 per cent, growing by 6 per cent YoY. Vivo’s T2x, Xiaomi’s Redmi A2, and Realme’s C55 were the highest shipped MediaTek-based models. Qualcomm’s share dropped to 25 per cent, a shipment decline of 6 per cent YoY.

However, despite all the action around smartphones, feature phones are clearly not dying out. After declining for four consecutive years, 61 million feature phones were shipped in 2023, growing by 8 per cent YoY. While Samsung exited the feature phone segment, the entry of Reliance Jio’s new 4G feature phone fuelled growth in 2H23.