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Smartphone shipments to India recovered in the second quarter, boosted by models that cost $100 or less
Updated : 12 August 2015

After a slow start to 2015, smartphone shipments to India recovered in the second quarter, boosted by models that cost $100 or less. According to IDC, 26.5 million devices were shipped to India during that time period, up 44 percent from 18.4 million units a year ago. Samsung, Micromax and Intex took a combined 51 percent share of the market.



Smartphone shipments to India declined for the first time ever at the end of 2014 and continued to be lackluster through the first quarter of 2015. Smartphones, however, weren’t the only segment under pressure.



IDC noted that the overall market for mobile phones in India fell by 6 percent year-over-year in the second quarter. Total shipments of mobile phones to India started to decrease at the end of last year due to a combination of seasonality and low demands from retailers who still have surplus inventory.



Just 59.4 million handsets were shipped to India last quarter, down from 63.2 million handsets 12 months ago. This means that slowing shipments of feature phones may not necessarily boost shipments of smartphones.



Instead of consumers upgrading from feature phones to smartphones, IDC attributes last quarter’s recovery in smartphone shipments to a combination of low-priced models and stronger distribution networks as companies like Lenovo and Xiaomi use e-commerce and flash sales to sell devices directly to consumers who don’t live near a brick-and-mortar store.



As China’s smartphone market hits a plateau, many Chinese companies are hinging their growth prospects on India. For example, Xiaomi recently announced that it has partnered with Foxconn to manufacture smartphones and tablets in India for local consumers.



In the second quarter of 2015, Chinese vendors managed to triple their shipments year-over-year. Lenovo, Xiaomi, Huawei, and Gionee doubled their share of India’s smartphone market to 12 percent from the second quarter of 2015.



India’s smartphone market, however, is still dominated by Korean electronics giant Samsung and Indian vendors Micromax and Intex. Lenovo was the only Chinese vendor in the top five list, with a 6 percent market share.



According to IDC, key differences between China and India’s smartphone markets include price points and slower adoption. In the second quarter of 2015, 20 percent of smartphones sold in China cost less than $100, but in India devices in that price segment made up 50 percent of all smartphones shipped. Furthermore, consumers will switch to smartphones more gradually than their counterparts in China.



IDC still expects India, however, to surpass the U.S. as the world’s largest smartphone market by 2017.



Samsung, whose earnings are under pressure as it faces competition from other smartphone makers, managed to take a 23 percent market share, despite a quarter-over-quarter shipment decline, driven by cheaper models like the Galaxy JI and the older Galaxy Core. Micromax experienced 60 percent quarter-over-quarter growth and currently has 17 percent of the Indian, due to smartphones in the $50 to $150 price bracket. Intex, meanwhile, took 11 percent of the market by selling devices for less than $100.


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