Smartphone market: India pips US to second spot

CHENNAI: The aggressive expansion of Chinese smartphone-makers in India has helped the country dethrone the US to become the second-largest smartphone market in the world.
India is now next only to global leader China in terms of smartphone units shipped. Shipping around 158 million smartphones in 2019, India beat US shipments of 153 million, shows recent data from Counterpoint Research.
The strategy of Chinese brands to introduce flagship-grade features at attractive price points to capture India’s new smartphone users helped the surge, along with growth of e-commerce making mobiles more accessible to the population, Counterpoint’s analysis noted. Chinese brands — comprising Xiaomi, Vivo, OnePlus and others — together held a record 72% share of the Indian market in 2019 compared to 60% a year ago.

With shipments of almost 395 million in 2019, China’s smartphone industry is witnessing a decline, while Indian smartphone sector grew 7% year-on-year in 2019.
First-time & repeat buyers drive phone demand in India
However, the India smartphone market growth was in single-digits for the first time on an annual basis as slowdown marginally impacted the industry, which grew 10% in 2018. “The US is a mature smartphone market driven by users looking to upgrade, which has slowed as users there are holding flagships for a longer period of time,” Tarun Pathak, associate director, Counterpoint Research, told TOI. In contrast, Indian demand is coming from both first-time and repeat buyers, and is still under-penetrated relative to the US, he adds.
Pathak estimates it will take India at least four to five years to close the gap with China. “There is a good mix of second-hand or refurbished phones, which take some share [away] from new phone demand in India, making it difficult to surpass China,” he said.
Only around 55% of India’s mobile phone subscribers are on the 4G network, shows Counterpoint data, and as more people migrate from feature phones to smartphones, the demand will rise. Hyper-competition will also help in future growth.