India’s smartphone market growth is accelerating



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The Indian mobile phone market thrived in 2018, with shipments of feature phones (11%) growing faster than smartphones (10%) for the first time ever, according to Counterpoint Research. In 2018, demand for feature phones — or internet-connected mobile phones that don’t run third-party apps — was catalyzed by Reliance Jio’s low-cost 4G-enabled feature phone.

Feature Phone Shipment Share in IndiaBusiness Insider Intelligence

Jio’s JioPhone is one of the most affordable feature phones on the market, and the company began offering special price discounts to convince 2G feature phone users to exchange their old devices for new JioPhones in July.

The allure of Jio’s offerings helped advance it to first place among leading vendors by shipments in India, up from third last year, as it captured 38% of shipments compared with 11% in 2017.

The overwhelming demand for feature phones will lay the groundwork for a booming smartphone market, with adoption supercharging at scale in the years ahead. Feature phones tend to serve as a gateway to smartphone adoption because they incorporate features like internet access and music, but they lack the advanced functionality and sophistication of smartphones, including app stores. While feature phones currently account for 70% of India’s mobile user base, that share is expected to drop to 61% in 2019. 

And as India’s smartphone market matures, it will open opportunities for wireless carriers and device manufacturers alike to capture consumers in the region.

  • Telecoms can offer special promotions to lure new smartphone users to their network. Since feature phone owners are likely more cost-sensitive than smartphone users, Indian telecoms would be wise to offer special discounts for first-time smartphone buyers to convince them to make the leap. And as the pool of new smartphone subscribers expands, telecoms will be better positioned to grow wireless services revenue. 
  • Smartphone manufacturers could shift operations to India, potentially resulting in a sales boom. Local production would drastically reduce the cost of smartphones for consumers in the country. For instance, the $999 64GB iPhone XS goes for approximately $1,424 in India. The transition to local production, which is a move India’s government and industry groups have been pushing for, could ultimately help smartphone vendors establish a stronger presence in the region and generate an increase in sales. 

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