While India is the fastest growing smartphone market in Asia, International Data Corporation (IDC) found that the Indian smartphone market observed shipment contraction in Q4 for the first time ever (quarter on quarter basis). This was largely owing to a high channel inventory at the beginning of the quarter amongst general trade which in turn was caused by the surge witnessed in online sales during festive season.
Feature phone to smartphone migration trend is clearly visible. Q4 2014 was seen as a correction phase wherein the smartphone market declined by 4% while the feature phone market plummeted by approximately 14% over Q3 2014. The overall mobile phone market stood at 64.3 million units in Q4 2014, which reflects a sequential drop of 11% over Q3 2014 and an annual drop of 5%. Smartphones formed a healthy 35% of the overall mobile business in Q4 2014, which is up by 13% from a year ago i.e. Q4 2013.
Smartphone vendors are quick in gauging the consumer demand for 4G handsets. In percentage terms, 4G handsets are still in single digit. But vendors who are not yet ready with the 4G portfolio are likely to miss the next wave of the smartphone growth story. says Karan Thakkar, Senior Market Analyst, IDC India.
Shipment contribution from vendors like Asus, Microsoft and HTC has witnessed traction in the recent past. Asus’s growth is somewhat linked to the handset vendor itself. The Zenphone series is always in demand and often the product is out of stock at the retail counter. On the other hand, Microsoft and HTC has more aggressively priced products to offer.
“In the current market scenario there is a drive in demand for products pitched with high specifications at low price points. This trend is likely to continue over the next 4 to 6 quarters, post which consumers are expected to turn back to the handset vendors who charge premium for quality.” adds Thakkar.
Samsung maintained its leadership position in Q4 2014. Apple posted stiff competition to Samsung during this time. “Online exclusive” brands are hurting the brand in the value for money category.
Micromax witnessed an inventory correction in Q4 2014 owing to high inventories pumped into the channels during the previous quarter.
Intex did not feature in the top five smartphone vendor list until Q3 2014. The retail presence of the brand has seen more than a twofold increase. Focused product launches and media advertisements worked well for the brand.
Lava has slipped to the 4th spot. However, the brand remains consistent and stable with a good amount of visibility of its distributors.
Xiamoi’s “online only” strategy has paid off well. Q4 was the first complete quarter for the brand. Even with minor hiccups like temporary ban on a particular handset model, the brand made it to top 5 smartphone vendor list.
The overall mobile phone market shrank by 11% qurter on quarter. The steep fall can be attributed majorly to the feature phone category. While Karbonn did not make it to the top five vendor list in smartphone category, it continues to remain strong in the feature phone segment.
A look at the overall vendor share shows the strong presence vendors have in the feature phone market to make it in the top five list at an overall level.
IDC India Forecast:
IDC anticipates a sluggish Q1 2015. However few global vendors which were in the inventory correction phase until now are likely to exhibit big shipment numbers starting Q1.
“Operators are gearing up for 4G network rollout. For vendors and ecosystem partners, greater emphasis on 4G enabled handsets at competitive price points will be the focus. End-users’ desire to upgrade and keeping abreast with the latest technology, will continue to drive a strong growth for the smartphone market in CY 2015.” says Kiran Kumar, Research Manager, Client Devices, IDC India.