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India Premium Smartphone Segment Grows 112% YoY in Q2 2023; India Now Among Apple’s Top 5 Markets

India’s premium smartphone segment now contributes a record 17% to its overall shipments.
With an 18% share, Samsung led India’s smartphone market for the third consecutive quarter.
Samsung also surpassed Apple to become the top premium segment (>INR 30,000 or ~ $366) brand.
Apple continued to lead the ultra-premium segment (>INR 45,000 or ~$549) with a 59% share.
vivo maintained its second position. It was the only brand among the top five to experience YoY growth.
OnePlus was the fastest-growing brand in India’s smartphone market in Q2 with 68% YoY growth.

New Delhi, Hong Kong, Seoul, London, Beijing, San Diego, Buenos Aires – July 28, 2023

India’s smartphone shipments declined 3% YoY in Q2 2023 (April-June), according to the latest research from Counterpoint’s Monthly India Smartphone Tracker. Though this decline was the fourth consecutive quarterly decline, its magnitude reduced significantly, from 19% in Q1 to 3% in Q2. Base effect, pent-up demand and improving macroeconomic conditions helped the market close at less than the expected decline. However, the premium smartphone segment presented a different picture, growing 112% YoY in Q2 to contribute a record 17% to the overall shipments.

Commenting on the market dynamics, Senior Research Analyst Shilpi Jain said, “In Q2 2023, OEMs saw improvement in the inventory and demand situation ahead of the coming festive season. Aggressive measures were implemented by OEMs as well as channels during the quarter to clear existing inventory through multiple sales and promotions. At the consumers’ end, falling inflation and better growth prospects facilitated demand recovery. 5G upgrades also played a major role as OEMs kept launching 5G devices in the INR 10,000-INR 15,000 (~$122-$244) segment for a wider reach. We believe brands will be coming up with interesting launches and offers to lure consumers during the festive season and 5G will be a big growth driver here.”

Source: Counterpoint Research Market Monitor

Notes: Xiaomi includes POCO; OPPO excludes OnePlus; vivo includes iQOO; Figures not exact due to rounding

Commenting on the competitive landscape and brand-level analysis, Research Analyst Shubham Singh said, “Samsung remained at the top position for the third consecutive quarter with an 18% market share. The brand also surpassed Apple to regain its top position in the premium smartphone segment (>INR 30,000, ~$366) after one year with a 34% share. Aggressive offers on the Z Flip3 and S21 FE, Samsung Finance+ and high demand for the latest premium A-series and F-series devices drove this growth. However, Apple continued to lead the ultra-premium segment (>INR 45,000 or ~$549) with a 59% share. India is now among Apple’s top-five markets.”

“vivo maintained its second spot in the overall market and was the only brand among the top five to experience YoY growth. Strong offline presence, growth of sub-brand iQOO in online, and multiple launches across price tiers facilitated this growth. OPPO has been consistently expanding its shipments in the higher-tier segments, with a particular focus on the upper mid-tier range (INR 20,000-INR 30,000 or ~$244-$366), showcasing its strategy to cater to diverse consumer needs. OPPO emerged as the top brand in this segment with a 21% market share. OnePlus was the fastest growing brand in India’s smartphone market in Q2 with 68% YoY growth.”

Other key insights

5G smartphone growth: In Q2 2023, 5G smartphone shipments in India crossed the 100-million cumulative mark as 5G upgrades picked up pace driven by the expansion of 5G networks and availability of affordable devices. 5G smartphone shipments grew 59% YoY during the quarter.
Premiumization trend: The premiumization trend gained momentum as the segment grew at a faster rate of 112% YoY. Rise of a value-based incentive system for retailers, aggressive promotions, availability of credit through various financing schemes, and OEMs’ focussed approach are driving premiumization in India.
Channel dynamics: Offline channel share has been growing and is expected to rise to 54% in 2023. Online-heavy brands like Xiaomi, realme and OnePlus are now emphasizing offline expansion to enhance customer engagement and ecosystem development. Samsung and Apple are also increasing their offline presence to cater to diverse consumer preferences. This shift reflects a more comprehensive approach, leveraging both online and offline channels to create a seamless and personalized customer experience.
4G feature phone growth: 4G feature phone share in the overall feature phone shipments increased to 10% in Q2 2023 driven by the JioBharat and itel Guru series’ launch. We believe this share will increase to 18% by the end of 2023. Growing demand for UPI, multiple launches from OEMs and Reliance push will help the segment grow further.
Inventory levels: The market was able to exit Q2 2023 with eight weeks of inventory as Xiaomi and realme managed to clear most of their inventory through multiple sales and promotions.
Other notable brands which grew during Q2 2023 were Apple (56% YoY), Transsion (34%), Lava (53% YoY) and Nokia (6% YoY).

The comprehensive and in-depth ‘Q2 2023 Market Monitor’ is available for subscribing clients.

Feel free to contact us at press@counterpointresearch.com for questions regarding our latest research and insights.

The Market Monitor research relies on sell-in (shipments) estimates based on vendors’ IR results and vendor polling, triangulated with sell-through (sales), supply chain checks and secondary research.

You can also visit our Data Section (updated quarterly) to view the smartphone market shares for World, US, China and India.

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

Shilpi Jain

Shubham Nimkar

Tarun Pathak

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vivo’s Strategy Paying off as China Consumers Upgrade Phones

Beijing, Hong Kong, Seoul, Taipei, London, Boston, Toronto, New Delhi – December 10, 2021

The mid-to-high-end segment is increasingly becoming more important for Chinese OEMs as consumers continue to upgrade their smartphones. Higher-value phones also offer more profitability for OEMs, which are witnessing a decline in shipments due to the shrinking of China’s smartphone market.

Over the past year, vivo has made significant progress in China’s mid-to-high-end segment. Its market share in the $500-$599 price band (wholesale price) has risen from 10% in September 2020 to 20% in September 2021. This was driven by the strong performance of the vivo X70 Pro, launched in September. vivo continues to move up the value chain with relentless efforts in research and innovation in camera technology, including entering a strategic partnership with optical technology leader ZEISS.

Counterpoint Research expects China’s smartphone market to see flattish growth in 2021. It is a challenging market for all OEMs, especially given the hardware situation. With a slow market size growth rate, leading OEMs tend to move into the game of revenue and average selling price (ASP).

Further, Chinese OEMs are no longer pleased to be crowned as the “king of affordable”, which means domination in the $157-$314 (CNY 999-CNY 1,999) retail price bands. They are hungry to grab more share in the $470 (CNY 3,000) and above segment. We can call the $470-$630 (CNY 3,000-CNY 4,000) retail price segment the entry premium segment and a strategic territory for all Chinese OEMs.

In Q3 2021, vivo, with all the efforts of strategic portfolio planning and continuous channel evolution, took the leading place in the $500-$599 segment, driven by the outstanding performance of X series.

vivo launched its S series in April 2021, aiming to free the X series from the $470 (CNY 3,000) and below segment. Before that, the X series had blurring boundaries. While it was supposed to be a higher segment series, it was still present in the $470 (CNY 3,000) and below segment. To the market, the X series was meant to increase vivo’s ASP but failed. The S series came at the right time because it was not only different from the Y series, which had already impressed the market with its entry-level products, but also let the X series focus on the premium segment. The restructuring strategy has proved to be a success.

As we may recall, the $500-$599 entry premium segment used to be dominated by Huawei. HONOR, which has been carved out of Huawei as a separate company, sees Apple as a role model, which its CEO George Zhao has admitted publicly a few times, and will definitely launch products in this segment. Xiaomi’s Q3 2021 earnings brief also states that the company is performing well in the premium segment. Therefore, the $500 and above segment will be the next battlefield for all Chinese OEMs.

With the ASP of the Chinese mass market expected to continuously increase in the coming two years, the mid-tier S series holds great strategic importance for vivo.

Please reach out to press (at) counterpointresearch.com for press comments and enquiries.

You can also visit our Data Section (updated quarterly) to view the smartphone market share for World, USA, China and India.

Background

Analyst Contacts:

Ivan Lam

Mengmeng Zhang

Follow Counterpoint Research
press(at)counterpointresearch.com

vivo: The Low-profile King of China Smartphone Market

People hardly notice any public statement by vivo’s top management on the company’s culture or an eye-catching social media post lashing out at other brands. But the fact is vivo has retained the top spot in China’s smartphone market since Q1 2021. According to Counterpoint Research’s data, the OEM had a 24% market share in Q1 and Q2 2021, up from 16% in Q1 2020. vivo was followed by OPPO at 21% and Xiaomi at 17% in Q2 2021.

OEM Market Shares in China by Quarter

China Smartphone Shipments of vivo by Quarter

Though all top OEMs have benefited from Huawei’s retreat, it is vivo that has managed to reach the top spot with its secured supplies of crucial components, optimized product portfolio, and a strong distribution network.

Remarkable component supply chain management

The COVID-19 pandemic has plunged the whole world into a chipset shortage which is not expected to end soon. Main chipset suppliers for mobile phones — Qualcomm, MediaTek and UNISOC — are seeing lengthening delivery lead times. As a result, they are only focusing on key accounts and also increasing prices, the latest being UNISOC with its average 25% hike. But with the BBK group’s powerful supply chain, vivo can maintain a consistent supply of chipsets for its key volume segments — Y series and the newly launched S series. Within the Y series, there are 5G models available for as low as CNY 1,298 (~$200).

Optimized product portfolio

The newly launched S series of vivo is a liberator. Its focus on the CNY 2,000-CNY 3,500 segment means the X series is now free to focus on the CNY 3,500 and above segment. The Y series, with its focus on the CNY 1,999 and below band, remains a volume-driven product group. This clear categorization of smartphones has helped vivo’s performance in 2021. While retaining around 50% share in the CNY 1,999 and below segment with its Y series, vivo has managed to make a breakthrough with the S series and increased visibility in the CNY 3,500 and above segment with the X60 series. Other major Chinese brands have been aiming to have such product categorization and increase their ASPs (average selling prices), but their efforts in this direction are yet to see big results.

Channel distribution

Huawei’s woes have provided an opportunity for OPPO and vivo to grab more than 70% share in China’s offline channels. vivo has also gone in for a reorganization of its offline channel partners. The rising e-commerce sector has been hugely impacting both brands and offline channels. However, due to different levels of development in Chinese cities, there is still a big offline market. vivo has invested considerable resources in the offline segment, including in trade marketing, promoters, ATL and BTL synergy, and margin schemes.

iQOO: Designed for Generation Z

Although iQOO operates independently from vivo since its launch in 2019, it is still listed on vivo’s website as a series. Unlike OPPO, realme and OnePlus, iQOO is heavily focusing on the online segment. The consumer group it is eyeing here is those born in 1995 and beyond. These are the people who have been exposed to the internet, social media and mobile phones from their earliest youth.

iQOO has been the sponsor for ‘Honor of Kings – KPL’, an e-sport competition, since 2019. As the hottest smartphone e-sport competition in China, it has been attracting millions of viewers every season. In fact, the vivo family (vivo and iQOO) has been its sponsor since the beginning of this game back in 2016.

Fierce competition

On August 12, 2021, HONOR unveiled its flagship Magic 3 series, aimed at capturing the space vacated by the Huawei Mate and P series. However, its high prices have left many unimpressed. To Chinese consumers, a smartphone above CNY 4,000 is a segment reserved for a few, like Apple’s iPhone, Samsung’s S and Note series, and Huawei’s Mate and P series. This is because these brands have invested a lot over the years in promoting their flagship models as high-end phones with cutting-edge technology and innovation. As we know, vivo has a series called NEX which is high on innovation, just like Xiaomi’s Mix series. Maybe vivo can use this series to target the high-end segment.

With HONOR pushing ahead with its comeback and Xiaomi’s focus on the offline channels, the Chinese smartphone market will see fierce competition between vivo, OPPO, Xiaomi, HONOR, Apple and keen-to-be-back Samsung in the coming days.

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