For first time ever, smartphone market in India shrinks, says IDC

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New Delhi | Updated: August 12, 2016 12:17:20 PM

The Indian Smartphone Market has witnessed a contraction in the last quarter of 2014, according to International Data Corporation (IDC).

smartphone, smartphone news, smartphone shrink, mobiles shrink, Mobiles loss, smartphone market, Markets loss smartphonesThe overall mobile phone market shrank by 11% qurter on quarter. The steep fall can be attributed majorly to the feature phone category. (Thinkstock)

Surprise, surprise. The Indian Smartphone Market has witnessed a contraction in the last quarter of 2014, according to International Data Corporation (IDC). The research firm attributed this “to a high channel inventory at the beginning of the quarter amongst general trade which in turn was caused by the surge witnessed in online sales during festive season”.

This Q4 correction meant the smartphone market declined by 4% while the feature phone market plummeted by approximately 14% over Q3 2014.The overall mobile phone market stood at 64.3 million units in Q4 2014, which reflects a sequential drop of 11% over Q3 2014 and an annual drop of 5%, the report said.

The report also underlined a smartphone migration trend, with the segment accounting for a healthy 35% of the overall mobile business in Q4 2014, up by 13% from a year ago. “Smart Phone vendors are quick in gauging the consumer demand for 4G handsets. In percentage terms, 4G handsets are still in single digit. But vendors who are not yet ready with the 4G portfolio are likely to miss the next wave of Smart Phone growth story.” Says  Karan Thakkar, Senior Market Analyst, IDC India.

One interesting point in the report is the fact that it still puts Samsung on top of the mobile phone pile in India with a 17 per cent maret share. It tops the smart phone market too with 22 per cent. Micromax is second in both segments with a 15 per cent and 18 per cent market share, respectively.

As reflected in some other market reports, Intex has jumped into the third spot this quarter with a  “two-fold increase in retail presence and focused product launches.” This has also been at the cost of Lava, which has slipped to the fourth spot.

Chinese “online only” brand Xiaomi entered the top five despite the legal issues with a particular handset model.

Asus also has grown thanks to its Zenphone, while Microsoft and HTC too have gained thanks to more aggressively priced products. “In the current market scenario there is a drive in demand for products pitched with high specification at low price points. This trend is likely to continue over the next 4 to 6 quarters, post which consumers are expected to turn back to the handset vendors who charge premium for quality.” Adds Thakkar. While Karbonn did not make it to the top five vendor list in Smart Phone category, it continues to remain strong in the Feature Phone segment.

IDC says it anticipates a sluggish Q1 2015, though “global vendors which were in the inventory correction phase until now are likely to exhibit big shipment numbers”. “Operators are gearing up for 4G network rollout. For vendors and ecosystem partners, greater emphasis on 4G enabled handsets at competitive price points will be the order of the day. End-users’ desire to upgrade and keeping abreast with the latest technology, will continue to drive a strong growth for the Smart Phone market in CY 2015,” says Kiran Kumar, Research Manager, Client Devices, IDC India.

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