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India’s mobile phone market has seen its first ever contraction. For the October-December 2014 quarter, domestic mobile phone sales stood at 64.3 million units — a drop of five per cent annually and 11 per cent from the July-September quarter.
According to International Data Corporation (IDC), the smartphone market experienced a shipment contraction largely owing to a high channel inventory at the beginning of the quarter, prompted by the festive season, during which there was a surge in online sales.
The quarter was a correction phase where the smartphone market declined by four per cent and the feature phone market declined by 14 per cent from the previous quarter.
However, the feature phone to smartphone migration is clearly visible in the numbers.
In the quarter under review, smartphones accounted for a healthy 35 per cent of the overall mobile business. It was 13 percentage points more than the same quarter in 2013.
“Smartphone vendors are quick in gauging the consumer demand for 4G handsets. In percentage terms, 4G handsets are still in single digit. But vendors who are not yet ready with the 4G portfolio are likely to miss the next wave of the smartphone growth story,” said Karan Thakkar, senior market analyst, IDC India.
Among vendors, Samsung managed to hold the top position. Apple posed stiff competition.“Online exclusive” brands are hurting the brand in the value for money category, said the report.
Micromax witnessed an inventory correction in the quarter owing to high inventories pumped into the channels during the previous quarter.
Intex did not feature in the top five smartphone vendors’ list until the previous quarter (July-September), but the swift pace at which the brand has clinched on to third spot is commendable. The retail presence of the brand has seen more than a twofold increase. Focused product launches and media advertisements worked well for the brand.
Xiaomi’s “online only” strategy has paid off well. This was the first complete quarter for the brand.
Despite minor hiccups, such as the temporary ban on a particular handset model, the brand made it to top five smartphone vendors’ list.
Shipment contribution from vendors like Asus, Microsoft and HTC has witnessed traction in the recent past. Asus’s growth is somewhat linked to the handset vendor itself. The Zenphone series is always in demand & often the product is out of stock at the retail counter. On the other hand, Microsoft and HTC has more aggressively priced product to offer, said IDC.
“In the current market scenario there is a drive in demand for products pitched with high specification at low price points. This trend is likely to continue over the next 4 to 6 quarters, post which consumers are expected to turn back to the handset vendors who charge premium for quality,” said Thakkar.
IDC anticipates a sluggish Q1 2015. However few global vendors which were in the inventory correction phase until now are likely to exhibit big shipment numbers starting Q1.
“Operators are gearing up for 4G network rollout. For vendors and ecosystem partners, greater emphasis on 4G enabled handsets at competitive price points will be the order of the day. End-users’ desire to upgrade and keeping abreast with the latest technology, will continue to drive a strong growth for the Smart Phone market in CY 2015,” said Kiran Kumar, research manager, Client Devices, IDC India.
SMARTPHONES: THE WORLD OF APPS
- For the Oct-Dec 2014 quarter, smartphones accounted for a healthy 35% of the overall mobile business in India
- Among vendors, Samsung managed to hold its top position
- Apple posed a stiff competition to Samsung during this period
- Intex clinched the third spot
- Xiaomi’s ‘online only’ strategy paid off well; it made it to the top 5 smartphone vendor list
