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India Smartphone Market Continues to Remain Under Pressure, Modest Growth Expected in 2023

  • India’s smartphone shipments are expected to fall 5% YoY in 2022, dipping for the second time in the last three years.
  • Weak demand in entry-level segments hit sales even as the premium segment continued to grow.
  • The market is expected to grow by 10% in 2023 to reach 175 million units.

New Delhi, London, Hong Kong, Seoul, Beijing, San Diego, Buenos Aires – December 22, 2022

India’s smartphone shipments are expected to fall 5% YoY in 2022, according to Counterpoint Research’s latest projections. The inflationary macro environment, component shortages and rise in their prices, and wild cards like the Russia-Ukraine war and weakness in the overall global economy affected the smartphone market globally, including in India.

The Indian market has seen a steady rise in the last five years barring the COVID-19-hit 2020 to grow 1.5 times from 2016 to 2021. The market is projected to grow 10% in 2023 to reach 175 million units.

What happened in 2022?

The market failed to meet expectations in 2022. It started the year with component shortages. But even as the situation resolved on the supply side by the first half of 2022, the consumer demand did not improve as expected. The weak demand was especially felt in the entry and mid-level price bands owing to the increase in retail prices due to the rise in component prices and inflationary macro environment. The premium market continued to grow in 2022 with the >INR 30,000 ($400) price band reaching a new high. The continued premiumization of the market is the main reason why it saw positive revenue growth with the highest-ever average selling price (ASP) of close to INR 20,000 ($250).

India Smartphone Market Shipments Set for Rebound in 2023

Source: Counterpoint Research India Quarterly Handset Outlook, Q3 2022

Why will the market rebound in 2023?

  • High installed base: India currently has more than 600 million smartphone users, a number which is expected to grow over time as more feature phone users migrate to smartphones. The replacement demand from these users will drive the market in 2023 and beyond.
  • 5G push: 5G networks are now live in multiple cities. Even though 5G smartphones have been making news in the market, they will account for just one-third of the market in 2022. 5G has been high on Indian consumers’ wish lists and with 5G networks now being available, many consumers will replace their 4G smartphones in 2023.
  • Government purchase of smartphones to push sales: The state of Rajasthan has rolled out a tender for the acquisition and distribution of smartphones among women in 2023.
  • Improvement in macro environment: We also expect the inflationary macro environment to get better next year. Therefore, consumers who postponed buying a new phone in 2022 will be able to buy a new one in 2023.

Long-term outlook remains positive

Despite the dip in 2022, India’s smartphone market has been resilient and performed better than many other regions. A large installed base, feature phone-to-smartphone migration, local smartphone production, development of supply chain and the emergence of newer use cases will continue to grow the market in the longer term.

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts

Ankit Malhotra
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Counterpoint research is a young and fast growing research firm covering analysis of the tech industry. Coverage areas are connected devices, digital consumer goods, software & applications and other adjacent topics. We provide syndicated research reports as well as tailored. Our seminars and workshops for companies and institutions are popular and available on demand. Consulting and customized work on the above topics is provided for high precision projects.

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