Key takeaways

Overall mobile handsets and the smartphone segment witnessed a healthy growth of 6% and 15% YoY respectively in Q1 2017.

• Smartphones and feature phones contributed equally to the overall mobile handset shipments in the quarter.
• LTE-capable smartphones contributed 96% of total smartphone shipments in Q1 2017. LTE is now a default feature for smartphones in India.
• Qualcomm-embedded smartphones grew a healthy 64% year on year and growing its share in the smartphone market during Q1 2017. The increase in mid segment smartphone shipments drove this growth.
• Eight out of ten smartphones shipped supported a 5-inch or bigger display. Users are enjoying content on bigger screens, while cut-throat competition between telecom operators is resulting in low-cost 4G tariff plans.
• Voice-over-LTE (VoLTE) capability in some networks is helping to drive a new device category called 4G feature phones(sometimes called ‘smart feature phones’). These are providing a way for current feature phone users to take advantage of low/no cost voice calls over the 4G LTE networks. Lava was the first to launch a 4G feature phone. Micromax, LYF, and other brands plan to launch 4G feature phone in the coming months.
• Indian brands are expanding to overseas markets for growth as they are losing their footing in the home market.
• Almost four out of five mobile phones shipped were made in India during Q1 2017. The imposition of the Goods and Services Tax (GST) will have an impact on domestic manufacturing and the government will need to continue incentives for locally manufactured mobile phones to further push the domestic manufacturing ecosystem.

Exhibit 2: India Smartphone Growth by Price Band and Rankings Q1 2017

• Mid end segment (₹15,000-₹20,000, US$230-US$310) witnessed the highest growth of 158% YoY during Q1 2017. Most of the growth was driven by Samsung, OPPO, vivo, Gionee, and Motorola.
• Premium segment (>₹30,000, US$465) grew a healthy 35% YoY. Samsung retained the top position with 48% market share, followed closely by Apple at 43% market share. OnePlus, OPPO and Google made it to the top five in this segment, but each with marginal shares.
• Integration of high-quality (8 Megapixel and above) selfie-focused camera in smartphones is one of the fastest growing trend though merely a supply side push to drive the selfie trend. Sales of devices focus on selfies trend grew annually by a factor of nine in Q1 2017. The segment was mainly driven by Samsung, OPPO, vivo, Lenovo and Gionee.

Exhibit 3: Selfie-focused Smartphone Brands Market Share Q1 2017