India shipped 124 mn smartphones in 2017 as effects of demonetisation wore off

Chinese brands dominated smartphone shipments, while JioPhone led a surge in the feature phone segment in the last quarter. 

India was the fastest-growing smartphone market in the world in 2017. Shipments touched 124 million for the year, registering an annual growth of 14 percent — the highest globally — according to IDC. The effects of demonetisation have worn off, and fourth quarter (Q42017) sales registered an 18 percent growth year-on-year.

Chinese players continued to dominate, with Xiaomi emerging as the market leader ahead of Samsung for the second successive quarter. Xiaomi occupied 26.8 percent of the smartphone market in Q42017, while Samsung’s share stood at 24.2 percent. Vivo, Lenovo and Oppo completed the top five with shares of 6.5 percent, 5.6 percent and 4.9 percent respectively.

Xiaomi tripled its shipments year-on-year and sold more than 2 million units of Mi Phones via offline channels. “In continuation of its offline expansion through Mi stores and preferred partners, Xiaomi appointed its first product endorser, and is now very aggressive in above the line marketing, which helped the brand to gain traction in the offline channel,” said IDC.

While Xiaomi was dominant in Q3 and Q4, Samsung led shipments for the overall year. The Korean manufacturer’s yearly share was 24.7 percent compared to Xiaomi’s 20.9 percent. Samsung’s strong distribution network and brand equity work in its favour while it struggles to match Xiaomi on an aggressive pricing strategy. 

IDC expects the rivalry to intensify in the coming quarters. More new and old players will join the race, and make the most of India’s low smartphone penetration. The domestic market is estimated to post a “double-digit growth for next couple of years” — contrary to what mature smartphone markets like the US and China are witnessing.

Jaipal Singh, Senior Market Analyst, Client Devices, IDC said: “While the competitive landscape is becoming more challenging in India, the low smartphone penetration remains a major attraction for all devices vendors, and they are now making serious attempts to address the problem of affordability in India with the introduction of more affordable products, resulting in initiatives such as Android Oreo 'Go edition', telco bundling with low cost 4G smartphones and even the 4G feature phone JioPhone.”

The rise and rise of feature phones

2017 was, what IDC calls, “an exceptional year” for feature phones. The category witnessed a 17 percent annual growth after declining for three consecutive years. The feature phone explosion was, of course, led by the Reliance JioPhone which started shipping in October.

About 164 million feature phones were shipped in in 2017, growing more than 17 percent from 140 million a year ago. JioPhone emerged as the market leader in its very first quarter (Q42017) of shipments. In Q4 alone, vendors shipped 56 million units of feature phones, resulting in the highest-ever shipments in a single quarter. JioPhone drove a massive 67 percent year-on-year growth in the category.

In Q42017, JioPhone held a 24.1 percent market share ahead of Samsung’s 14.5 percent and Micromax’s 8.7 percent. , Upasana Joshi, Senior Market Analyst, IDC India, said: “Xiaomi taking a lead over Samsung in the smartphone market and Reliance Jio emerging as the leading feature phone company in India were the two key highlights of the last quarter of 2017.”

India, meanwhile, continues to lead the global feature phone market. There are over 400 million estimated feature phone users in the country. Some of them upgrade from one feature phone to another, thus pushing up consumption. The smartphone revolution has eluded them so far.