India still an underpenetrated smartphone market



India may now be the second largest smartphone market in the world, reaching 158 million shipments last year, but it remains underpenetrated relative to many other markets – a situation that is likely to change quickly.

Latest data from market research firm Counterpoint Research shows the Indian smartphone market grew 7% in 2019 (while feature phone shipments declined 42%), thanks in large part to activity in the mid-tier segment and the growing use of online channels to get new products to market faster.

Specifically, Chinese brands introduced many flagship-grade features and capabilities to their mid-tier offer in order to capture demand coming from users looking to upgrade from their first or second smartphone. These same brands are also launching a range of sub-brands to the same end.

All major brands are now aiming to expand in the mid- to high-price tier, according to Counterpart, which said this is likely to be the fastest-growing segment in 2020.

Counterpoint Research associate director Tarun Pathak noted that 4G penetration among subscribers currently stands at around 55%. “Going forward, we expect this demand to grow further,” he said, pointing to the ongoing transition from feature phones to smartphones and the diffusion of key smartphone features to the entry-level price tier.

“We further expect brands to have multi-tier strategies involving partnerships in the mobile ecosystem from hardware, software and services, thus creating opportunities within different segments like entertainment, gaming, financial services and more,” he added.

With the market evolving rapidly, the Times of India observed that the leaders in the premium segment – OnePlus, Samsung and Apple – will face a bigger challenge from the aggressive marketing approach of lower-priced Chinese brands like Realme, Xiaomi, Oppo and Vivo.

That hasn’t deterred OnePlus from announcing plans to triple to 1,000 the number of people it employs in its R&D base in the country over the next two years.

“India is a global base for our 5G efforts, both in terms of device exports and R&D,” CEO Pete Lau told the Economic Times. “India is the highest priority, which includes exploring new approaches.”

Sourced from Counterpoint Research, Times of India, Economic Times; additional content by WARC staff



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