Smartphone shipments in July-September: Mid-range segments shine as Chinese brands dominate market

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New Delhi | Published: November 12, 2019 4:32 AM

The average selling price (ASP) for the overall smartphone market was $159 (around Rs. 11,000), with 2.7% year-on-year growth in Q3 2019.

4G-enabled feature phones declined 20.3% year-on-year due to heavy inventory in the channel.

The domestic smartphone market registered one of its best performances during third quarter of calendar year 2019, carrying a shipment size of almost 47 million units with handsets in the Rs. 21,000-35,500 range emerging as the fastest growing segment. Attractive schemes and discounts aided the mid-range segment (Rs. 14,000-35,000) during the quarter to increase its share at the expense of the low-end price category.

As per the latest numbers by IDC, the smartphone market shipped a record 46.6 million units in the Q3 2019, with 26.5% quarter-on-quarter growth and 9.3% year-on-year, driven by multiple online sales festivals, new model launches, and price corrections on a few key models by various brands.

“While the low-end price segment of $200 (Rs. 14,000) still accounted for 80% of overall India smartphone market in Q3 2019, its share dropped 5 percentage points year-on-year at the cost of the mid-range segment of $200-500, gaining 5 percentage points to 18.9%,” IDC said.

The fastest growing segment during the quarter was $300-500, with double the shipments year-on-year as key models like OnePlus 7, Redmi K20 Pro and Vivo V15 Pro had good traction.

The $200-300 was the second fastest growing segment with 47.8% year-on-year growth with strong shipments of Samsung Galaxy A50, Redmi Note 7 Pro and Vivo Z1 Pro, it added.

The average selling price (ASP) for the overall smartphone market was $159 (around Rs. 11,000), with 2.7% year-on-year growth in Q3 2019.

“In the premium ($500+ or over Rs. 35,500) segment, Apple continued to dominate with a market share of 51.3% in Q3 2019, on the back of affordability offers and price drops on previous generation models like the iPhone XR, iPhone 8 and iPhone 7 (128GB), along with the newly launched iPhone 11/Pro series.

The feature phone market, which accounts for 43.3% of the total mobile phone shipments, registered a 17.5% year-on-year decline in Q3 2019 with shipments of 35.6 million units during the quarter.

4G-enabled feature phones declined 20.3% year-on-year due to heavy inventory in the channel.

During July-September, the offline channel continued to face challenges, leading to a 2.6% year-on-year decline. Even as offline channel players tried to match their offers in line with online players, they fell short of the attractive deals that a consumer could grab in the online space and were still dealing with leftover inventory from previous quarters. Consumer enquiries and footfall were relatively slow at retail counters through September, compared to the previous years.

“Continued aggression by online platforms with attractive cashback and buyback offers as well as affordability schemes like No Cost EMIs and financing options were key in taking the share of online channel to a record high of 45.4% with year-on-year growth of 28.3%,” said IDC India’s associate research manager (Client Devices), Upasana Joshi.

Going ahead, IDC India research director (Client Devices & IPDS), Navkendar Singh said, “We expect the smartphone market to see only mid-to-high single digit year-on-year growth for the year 2019. This can be attributed to a strong undercurrent of passive consumer sentiment and muted shipments in the last quarter of the year due to a record Q3 2019 when channel stock levels went up.

Additionally, the unabated aggression of the online players will continue to be a challenge for the offline channel, which remains the largest channel for smartphones in India. All these give us an indication of sluggish growth next quarter.”

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