Ecommerce India is now the primary destination from smartphone makers amongst the Asian countries. In our previous article titled: ‘Alibaba Putting India On Its Global Road Map’ we had brought to you how India is becoming the hot destination for the global retail and etail giants and how every company ranging from Amazon (AMZN, Financial) to Wal-Mart (WMT, Financial) are expanding their hold in India. When the retail world is foraying in the subcontinent, how can the smartphone segment remain far behind, since the most sought after product in consumer durable section is arguably the smartphones and mobile devices.
India has the second largest population in the world and already has an immense market for consumer good. Considering the latest range of smartphone released from ultra-cheap ones to the premium category, there is a smartphone for every strata of the Indian population demography. Let us take a stock of how the smartphone market is performing in the Indian sub-continent.
Smartphone Market for a Smarter India
This year the festive season sales has really boosted the smartphone sales in India to such a level that the growth rate of the smartphone market works out to a quarter-on-quarter growth of 27 percent in Q3 2014 to propel it as the largest growing smartphone market in the APAC region.
According to theInternational Data Corporation’s (IDC) report, the overall mobile market stood at 72.5 million units in Q3 2014, registering a 15 percent quarter-on-quarter rise and a 9% year-on-year growth.
"With 44 million units shipped in calendar year 2013 and the current market scenario hinting at 80 million plus shipments in calendar year 2014, we have a big chunk of end-user market which is waiting to get refreshed. To add to this, new initiatives on the 4G front are expected to be rolled out soon, which should spark up demand in the smartphone market in calendar year 2015 further," said Karan Thakkar, senior market analyst, IDC India.
However, phablet sales have become dull and have hit a stagnancy which has been one of the key reasons for consumers opting for smartphones, the IDC stated.
"With 6 percent of the overall smartphone market, phablets are observed to be hitting a plateau. Smartphones are seen as the sweet spot for consumer preference. However, consumers need larger screen sizes to enjoy media content and with the 4G rollout expected in 2015, we expect the phablets segment to pick up again," said Kiran Kumar, research manager, client devices, IDC India.
The smartphone market
Interestingly, Micromax is gaining rapid grounds amongst Indian consumers just as Xiaomi did in China which we had pointed out in our article titles: ‘Micromax Walking The Xiaomi Path’ and is soon achieving threatening heights against Samsung (SSNLF, Financial), the market leader. In Q3 2014 Micromax managed to capture 20% of the total smartphone market share in India up by 2% from Q2 while the market leader Samsung stood at 25%. This is alarmingly close for the market leader, considering the fact that Micromax is a nascent player compared to Samsung.
The Q3 results also revealed that for the second consecutive quarter the smartphone shipment numbers grew by more than 80% year-on-year. This reflects the robust end-user demand for the category in the devices market in India and also indicates the buoyancy of the Indian smartphone market.
Of the overall mobile phone market in India smartphones accounted for 32% in Q3 2014, a huge leap from 19% in the same period a year ago. This is a strong indication for the global smartphone honchos like Apple (AAPL, Financial), Google (GOOG, Financial), Samsung, Lenovo (LNVGY, Financial) and even Xiaomi to saddle up for a great ride in India as the demand for smartphones are on the rise at a pace which is the highest in Asia and is comparable to that of the western developed economies.
According to the Asia-Pacific (excluding Japan) Quarterly Mobile Phone Tracker report, vendors shipped a total of 23.3 million smartphones in Q3 2014 compared to 12.8 million units in the same period of calendar year 2013.
Bottom-line
After the retail sector the smartphone sector is looking on the upside in the Indian subcontinent. India has an edge in terms of population count when it comes to scope for consumer segment. There can be several equations worked out by dissecting the smartphone market of India. In all probabilities the global smartphone powerhouses can use their loads of experience and dig out a bigger slice of the smartphone pie and boost their book of business globally. On the other hand the pace at which nascent companies like Xiaomi and Micromax are growing it would not be a surprise if one day these companies topple the so called smartphone market leaders and claim the top positions. From an investor’s point of view it would be worth keeping an eye on the newcomers in the smartphone segment because these companies do have the potential and might one day recreate the IPO maverick like Alibaba (BABA, Financial) in the Wall Street in the near future.
