India is experiencing a trend of premiumization in its smartphone market, with a growing demand for premium and ultra-premium devices, leading to increased sales and revenue for companies like Apple. Despite the flat yearly growth in the overall smartphone shipments in India during Q3 2023, the mid-premium, premium, and ultra-premium segments recorded double-digit growth in shipments.
According to the International Data Corporation (IDC), smartphone shipments in India saw single-digit growth in July and August. This growth can be attributed to the anticipation of the upcoming festive season by sales channels and retailers. This is a common trend in many regions where people tend to buy new devices during holiday periods.
However, September marked a significant decline in smartphone shipments, with the figures hitting their lowest point since 2019. The primary factor contributing to this decline was the high prices of smartphones, which resulted in reduced consumer interest. In response to these high prices, many potential buyers chose to postpone their smartphone purchases. Instead, they opted to wait for the festive sales during Diwali and the New Year, where they expected to find better deals and discounts on smartphones.
ASP of Smartphones in India
In Q3 2023, the Indian smartphone market experienced notable shifts in pricing and product preferences. The average selling price (ASP) of smartphones in India reached a new high of US$253 (~Rs 21,067) in Q3 2023, with a 5% QoQ and 12% YoY growth. This upward trend in pricing was partially counterbalanced by manufacturers’ efforts to provide budget-friendly 5G devices, coupled with discounts across various retail channels. Notably, this strategy had a substantial impact on the market, as the ASP for 5G smartphones in India dropped 9% YoY to US$357 (~Rs 29,727) during the September quarter.
The decline in 5G smartphone prices resulted in an increased demand among consumers. During Q3 2023, 5G smartphones captured a significant 58% share of the total smartphone shipments in India, totalling 25 million units. This surge in demand was particularly notable in the mass budget price segment, ranging from US$100 to US$200, where the share of 5G smartphones rose substantially to 52% in Q3, from the 34% share recorded in the previous quarter.
Some of the top-performing 5G models in India during Q3 2023 were the Samsung Galaxy A14, Apple iPhone 13, and Xiaomi Redmi 12.
“A swift uptake in affordable 5G smartphone shipments signals bullish sentiments and success of affordability efforts of the vendors. We should expect the previous generation of premium smartphone models to be in high demand this festive season, made affordable by various offers and upfront discounts across channels,” said Upasana Joshi, Research Manager, Client Devices, IDC India.
India Smartphone Shipments by Segment:
- The entry-level segment (sub-US$100) recorded a remarkable 16% YoY growth in smartphone shipments during Q3 2023, capturing a 20% market share.
- Smartphone shipments in the mass budget segment (US$100 to US$200) declined 14% YoY in Q3 2023, resulting in a drop in market share from 51% to 44%.
- India’s entry-premium smartphone segment (US$200 to US$400) grew a minimal 2% YoY in terms of shipments, securing a 22% share in Q3 2023.
- The demand for mid-range premium smartphones in India grew significantly during the September quarter. The mid-premium segment (US$400 to US$600), holding a 5% share, experienced a substantial 37% YoY growth in shipments.
- The premium segment (US$600<US$800) accounted for a 3% share of the overall smartphone market in India during Q3 2023. The segment registered the highest growth of 52% YoY in shipments, mainly due to increasing demand for iPhone 13, Galaxy S23/S23 FE and the newly launched Moto Razr 40.
- The super-premium segment (US$800+) similarly registered a healthy 43% YoY growth in smartphone shipments, with its share up from 4% to 6% in 3Q23. Apple dominated India’s super-premium segment, with a 60% share. Samsung’s share in this segment also grew from 24% to 36% in just one year, mainly due to the newly launched Galaxy Z Fold5/Flip5 and Galaxy S23+/S23 Ultra.
Surge In Foldable Smartphones
Notably, the shipments of foldable phones reached a record half million units in Q3 2023, signifying the growing interest in this innovative category. Samsung remained the dominant player, capturing a significant 66% share of the overall foldable market.
New launches by Motorola at more budget-friendly price points played a pivotal role in reducing the average selling price (ASP) of foldable smartphones in India. Consequently, the ASP dropped to US$1198 (~Rs 99,753) from the US$1319 (~Rs 1,09,828) recorded a year ago. This price reduction made foldable phones more accessible to a broader range of consumers and contributed to the remarkable growth in shipments, further solidifying Samsung’s leading position in the foldable smartphone market.
As the Indian smartphone market embraces premiumization, the demand for top-tier devices is reshaping the industry landscape. This transformation is fueled by the growing purchasing power of Indian consumers, coupled with the irresistible discounts and coupons provided by major e-commerce platforms like Amazon and Flipkart.
Global OEMs such as Apple and Samsung are capitalizing on this surge in demand for premium smartphones in India, intensifying the competition with established players such as Xiaomi, Oppo, and Vivo in this segment. Who will have the last laugh, let us know in the comment section below!
