According to the latest research from Counterpoint’s Market Monitor service, the smartphone shipments in India grew a healthy 23% annually in Q1 2016 compared to the global growth, which stalled for the first time ever since smartphones first begun to sell.
To provide some color, more than a billion smartphones will be sold in India over the next five years. This will drive the number of smartphone users from quarter of a billion to more than half a billion in the same time period, which will still be just 55% of the total population. Furthermore, the advent of advanced 4G LTE network infrastructure will also be a key catalyst in the country’s smartphone adoption in coming years. The role of players such as Reliance Jio, Bharti Airtel will be important to drive this growth by leveraging an ecosystem-level approach.”
Tarun Pathak, Senior Analyst at Counterpoint, commenting on Q1 2016 market and vendor performance, “The Indian smartphone market demand was healthy, as we saw newer brands continued to enter with attractive offerings and aggressive pricing throughout the quarter. The demand for LTE smartphones remained strong as two out of three smartphone shipped was LTE capable. With 4G LTE capability, 5-inch and above screen size is becoming important for Indian consumers as more than 60% of the smartphones shipped were phablets. More real estate in the hand means, smartphone users will do more on their devices from communication, content consumption, commerce to productivity.
Talking about the importance of LTE, the biggest surprise of the quarter was the rise of upcoming LTE operator Jio’s smartphone brand LYF. In the first quarter of its inception, LYF instantly climbed to become one of the top five smartphone brands in India in terms of shipment volumes. Jio with its massive LTE network and scale could be the key player to watch out for as it has already become the second largest LTE phone supplier during the quarter.”
Market Summary of smartphone growth India:
- More than 45% of the mobile phones shipped were smartphones.
- Two out of every three smartphones shipped in India were LTE capable.
- Samsung led the “Make in India” traction followed by Intex, Micromax and others.
- More than 60% of the smartphones shipped sported a 5” or larger display.
- One in Three smartphones shipped was powered by a MediaTek processor, while almost 39% of LTE smartphones were integrated with a Qualcomm processor.
Exhibit 1: India Mobile Phone and Smartphone Shipments 1Q 2016
Source: Counterpoint Research Market Monitor Q1 2016
*Lenovo Includes Motorola
- Samsung, led the mobile phone and smartphone market capturing more than a fourth holding its position during the quarter of launch of its flagship Galaxy S7/S7 Edge and refresh for its popular J series of smartphones.
- Domestic brands such as Micromax, Intex and Lava continued to perform well in the local market to compete with onslaught of Chinese brands such as Lenovo, Xiaomi, Oppo and Vivo.
- Samsung led the overall mobile phone market and the smartphone segment during the quarter with market shares of 24.9% and 28.8% respectively.
- Samsung’s J series drove volumes for Korean giant as it ramped up the series by launching multiple SKUs in entry to mid-level segment.
- With the help of improved design, stronger marketing push and wider distribution channels this Korean giant maintained its leading position despite stiff competition from local and Chinese players.
- It also led the LTE smartphone segment during the quarter, thanks to the broader refresh of portfolio with LTE capabilities.
- Micromax maintained the second position in both overall mobile phone market and the smartphone segment with a market share of 14.2% and 16.6% respectively.
- Micromax saw 19% increase in mobile phone shipments annually
- However, it faced intense competition in $50-$100 price segment from other local brands which led to decline in shipments during the quarter.
- It was the third largest LTE player during the quarter, falling behind the push from Reliance Jio which captured the second slot.
- Micromax’s Cyanogen based online only brand ‘Yu’ is growing steadily and saw a sequential growth of 8% in first quarter of CY2016 ending this March.
- Intex maintained its position in top 3 mobile phone players even though it lost some market share sequentially.
- The company held 11% of the overall mobile phone market and 10% share in the smartphone segment cementing its number three position in Q1 2016.
- Intex shipments grew a massive 45% annually in Q1 2016 thanks to expanding distribution, marketing and strength in tier-2 and tier-3 towns
- Smartphone shipment for the company grew at 24% annually with strong demand sub-$75 smartphone price band which is the key reason for its growth. However, the vendor needs to scale portfolio and drive volumes in mid smartphone segment to capture the growing number of upgrades.
- Lava maintained the fourth spot in the overall mobile phone market with 9% market share but lost its spot in top 5 smartphone players in the quarter to Lenovo (including Motorola) and Reliance’s Lyf brand.
- Lenovo including Motorola slipped to fourth position in smartphone segment, with a combined share of 8%. The dip was mostly due to aggressive competition in $150 price segment especially from new launches like Redmi Note 3 and Le1S.
- Lenovo was also the fourth largest LTE player during the quarter.
- A surprise in the quarter was the rise of Reliance Jio’s Lyf brand in first quarter of its inception, to top 5 position in the smartphone segment capturing 7% market share. This is the level of scale Jio is targeting once it switches on its LTE network later this year. We estimate, this quarter strong shipment was more of channel filling, the actual sell-through will happen in Q2 2016 as the operator starts full-fledged marketing and promotional activity.
- Lyf also instantly jumped to become the second largest LTE phone supplier surpassing Micromax & Lenovo during Q1’16.
- India smartphone market continues to attract new smartphones players. The entry of LeEco and subsequent positive response from the end users have lowered the barriers to entry in competitive Indian smartphone market.
- Meanwhile, Apple recorded a stellar 62% annual growth in the first quarter, though on a lower base, thus registering back-to-back sequential growth in spite of negative growth results globally for iPhones
- Apple’s iPhone SE saw a lukewarm response in the Indian market as exorbitantly high pricing seized to appeal the consumers.
- Microsoft further lost its market share in the smartphone segment with shipments now accounting for less than half a percent in Q1 2016 as it undergoes a strategy change limiting prospects for its own-branded phones.
- Meanwhile, the other brands which grew significantly during the quarter were the Chinese brands, Vivo (+759% YoY), OPPO (+183% YoY), Xiaomi (+35% YoY).
- Chinese brands all together captured 21% share of total smartphone shipments in Q1 2016.
Following chart depicts the fastest growing brands in Q1 2016:
Exhibit 2: India Smartphone OEM Annual Shipments Growth Q1 2016
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The Market Monitor research is based on sell-in (shipments) estimates based on vendor’s IR results, vendor polling triangulated with sell-through (sales), supply chain checks and secondary research.