Smartphone shipments hit a record high ahead of Diwali, but feature phones slow down

India's smartphone market stood insulated from the economic slowdown affecting other sectors, with device shipments reaching a record 49 million units for the September quarter.

The growth was driven by a slew of new launches, discounts and pre-Diwali offers launched by almost all brands, Counterpoint Research revealed in a report.

Xiaomi retained its leadership position with a 26-percent market share. Its shipments grew seven percent year-on-year driven by strong online sales of Redmi 7A, Redmi Note 7 Pro and Redmi Note 7S.

Samsung and Vivo followed with 20 percent and 17 percent shares, respectively.

Samsung shipments were driven by its budget segment device Galaxy A2 Core and its upgraded A series and M series (A30s, M30s, A10s, A50s and M10s). The manufacturer also registered growth in the premium segment riding on the Galaxy Note 10 series.

Vivo, meanwhile, reached its highest ever share in India smartphone so far riding on its mid-segment series (S1 and Y17) and a renewed focus on online sales channels, with new launches (U10, Z1X and Z1 Pro).

Realme (OPPO's sub-brand) and OPPO bagged the fourth and fifth spots with market shares of 16 percent and eight percent, respectively.

Realme, in fact, notched up record shipments, growing 6X over last year, making it the fastest-growing smartphone brand right now.

The top five brands accounted for nearly 87 percent of overall shipments. "This was mainly driven by the spree of pre-festive season launches, aggressive marketing and incentivised channel strategy," Counterpoint stated.

In the premium category, OnePlus emerged as the top brand, with shipments doubling over last year, mainly driven by the newly launched OnePlus 7T, and discount offers on the OnePlus 7 series.

Apple, on the other hand, entered the top ten due to price cuts on the iPhone XR. The new iPhone 11 series also contributed to "good channel demand".

Anshika Jain, Research Analyst at Counterpoint Research, explained, "The growth and maturity of online channels from serving more zip codes than ever coupled with greater customer service, attractive promotions from discounts to cashback to EMI and exchange offers will be pivotal in driving smartphone sales during this festive season."

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Slowdown in feature phone segment

While the smartphone market continued to grow impressively, the feature phone segment witnessed a sharp decline of 37 percent.

This was primarily due to a slowdown in new JioPhone shipments as "Reliance was focused on clearing the older JioPhone inventory ahead of Diwali season," Counterpoint revealed.

For the first time in several quarters, JioPhone failed to make it to the top five. Consequently, other feature phone manufacturers like itel, Lava, and Karbonn registered positive annual growth despite the overall segment slowdown.

itel emerged as the No. 2 feature phone brand with a market share of 16 percent in Q3 2019. Samsung led the segment with a 22 percent share.

Feature phone shipments might drop further given the growth of smartphones across consumer segments.

Karn Chauhan, Research Analyst at Counterpoint, said, "With smartphone brands continuing to expand their product portfolio with attractive advanced features for the mainstream and the mass market, this holiday season, we estimate that the demand for smartphones will supersede other categories despite the uncertain economic climate.”

(Edited by Evelyn Ratnakumar)

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