Four Out Of Five Smartphones Shipped In India During Q2 2014 Belong To Sub- $200 Category !

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Despite of the introduction of Chinese smartphone players, smartphone industry in India is recording a relatively slow quarter over quarter growth. Interestingly, low-price smartphones, below $200, are becoming more popular among people as its market share surged up to 81% in Q2, 2014 from 78% in the previous quarter. According to the latest report from Internet Data Corporation (IDC), overall smartphone shipments in India registered a 84% year-on-year growth in the second quarter of the year, but failed to replicate the same performance quarter-over-quarter.

mobile phone shipments share Q2 2013 - Q2 2014

In Q2 2014, Smartphone vendors in India shipped 18.42 million units, registering 4.72% growth compared to 17.59 million units in the previous quarter. Smartphone contributed 29% of total mobile phone sales, feature phones still holding the lion’s share of the mobile phone market in India. During the second quarter of the year, the vendors shipped 63.21 million units of mobile phones in total. The contribution of smartphones to total mobile phone shipments has been slowing down for the last few quarters. Between Q2, 2013 and Q1 2014 the growth of smartphone contribution remained to more than 4 percent point, while in the last one quarter it has increased by mere 1 percent point. This slow-down could be well attributed to the upgrade cycle of mobile phone in India is still 12 -14 months.

The growth of the smartphone market in India is largely driven by sub-$200 smartphones. In the last few quarters low-price smartphones have strengthened its market share due to aggressive marketing strategies by home grown vendors. Micromax is constantly closing the gap with smartphone market leader Samsung. In Q2, 2014 Samsung Electronics Co. Ltd. (KRX:005930) lost the sizable market share to Micromax and Motorola; the Korean smartphone giant managed to grab only 29% of the total smartphone market while the smartphone market share of Micromax surged up to 18%, an increase of 3 percent point from the previous quarter. The strong sales of Motorola’s Moto G and Moto E helped the company to join the list of Top 5 smartphone vendors in India very first time.

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smartphone vendors market share india Q2 2014 IDC

In contrast to the other report that positioned Micromax above than Samsung, IDC’s list of Top mobile phone vendors in India Q2 2014, remains unchanged. For smartphone market, both Samsung and Micromax, will have to redraw their sales strategy and probably will have to cut down their margins on entry-level and mid-range smartphones to stay afloat in the leading positions. The jaw-dropping price of smartphones introduced by Chinese vendors, Xiaomi and Gionee, and Motorola is pushing the other players in the cut-throat competition. While Xiaomi’s Mi3 is still rocking the market, Motorola is ready with Motorola G2 to take the market by storm once again.

smartphone shipments in India 2009 - Q2 2014

Since the beginning of 2014, the smartphone market in India has gone through multiple shifts. While the price war is showing no sign of slow-down, few other companies, especially Mozilla, are ready to fuel the competition with $25 – $50 smartphones. However, the opportunity window for smartphone vendors is still big enough for vendors; By the end of Q2 2014, there are nearly 111 million smartphones in India and nearly 750 million mobile subscriptions are still running on feature phones. As the average selling price (ASP) of smartphone is declining to a new low with each passing quarter, we could only see more vendors joining the race to grab the largest share of the pie from world’s second largest mobile phone market.

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