One in seven smartphones globally will be sold in India: Assocham-KPMG report

Rising affordability, local manufacturing, aggressively priced data packs to propel country's share of global smartphone pie

India, which is the fastest growing market for mobile handsets, is expected to have a 13.5 per cent share in global smartphone market by 2019 as more people start using smartphones on the back of rising affordability, local manufacturing and aggressively priced data packs, a report by Assocham-KPMG said.

When it comes to mobile handsets, India has grown at a compound annual growth rate of (CAGR) of nearly 14 per cent in the last four years from 2011 to 2015 and contributed nearly 7.6 per cent to the global smartphone market in 2015.

"With increasing popularity of smartphones and better availability of data services, the landscape of the Indian mobile handset industry has witnessed a paradigm shift," the joint study said.

 

The availability of smartphones in price range of Rs 3,000 to Rs 10,000 developed by local manufacturers along with low-cost data connectivity are fuelling the shift towards smartphone usage.

"The growth of Indian handset manufacturing companies has been nothing less than miraculous over the last five years. India manufactured 11 crore mobile phones worth Rs 54,000 crore in FY16, showing a year-on-year growth of 83 per cent and 186 per cent, in volume and value terms, respectively," the study said.

It added with the ability to provide feature rich yet affordable handsets, domestic manufacturers' share of the handset market is slated to grow further. This will be further enhanced by the increased penetration of telecom services in rural India.

Out of a total handsets sale of 30 crore units in FY15, smartphones contributed 11.40 crore units, i.e., 38 per cent. This contribution is projected to grow to above 50 per cent by 2020.

Boost in smartphone penetration is expected to cater to m-enablement of a variety of services such as mobile banking, e-commerce, mobile health, e-agriculture and services to small and medium scale businesses.

The study said with urban penetration levels reaching saturation, the industry is looking at rural India for continued growth.

As of February 2016, teledensity in urban areas was 153.93 as against 50.76 for rural India. Rural mobile phone subscriptions are already on the upswing. Nearly 38 per cent of rural population used mobile phones as of May 2015, up from 22 per cent in 2010.

The mobile handset sector is a key component in the overall telecom ecosystem and a key driver of the digital revolution in the country.

India is the second largest mobile market with over a billion subscribers at the end of Feb 2016, with 608.4 million urban subscribers and 443.5 million rural subscribers.