Smartphone Shipments in India Reaches an All-Time Record High In Q3 2016

Overall mobile phone shipments also reached a record all-time high thanks to featurep hones making a comeback with demand growing almost 23% sequentially

According to the latest research from Counterpoint’s Market Monitor service, the smartphone shipments in India grew a healthy 23% annually in Q3 2016 compared to the global smartphone market which grew modest 5%.

Commenting on the findings, Karn Chauhan, Research Analyst at Counterpoint Research highlighting growth of market, “India witnessed record quarter for smartphone and featurephone shipments during Q3 2016.The demand for smartphones is being fueled by growing importance of being uber-connected which is further catalyzed by rollout of LTE networks. However, at the same time the demand for the featurephones also saw an uptick to satisfy the sizeable population which have been laggards in adoption of smartphones. Though, out of all the smartphones being sold, almost seventy percent of them are now LTE capable with eighty percent of those LTE smartphones sporting VoLTE (Voice over LTE) capabilities signaling a significant polarization among the Indian demographics”

Pavel Naiya, Analyst at Counterpoint, commenting on Q3 2016 market and vendor performance, “While bulk of the first-time smartphone users were mostly using Indian or Samsung branded smartphone but the aggressive entry and growth of Chinese brands have prompted most of these users to upgrade to affordable but better spec smartphones. This has been possible because of Chinese brands adopting a direct and exclusive e-commerce channel strategy to be cost competitive. Though due to intense competition in the online channels where growth was saturating, during this quarter we saw a significant shift among these Chinese brands expanding to multiple e-commerce platforms as well as offline channels backed with strong promotions and a refreshed portfolio. Now Chinese brands contribute to almost one in three smartphones sold during the quarter.”

Market Summary:

  • Smartphone shipments grew healthy 23% YoY & 21% QoQ, closing on almost half of the total mobile phone shipped during Q3 2016.
  • Feature Phone shipments grew 2% YoY & 23% QoQ as feature phone to smartphone transition slowed down in recent quarters.
  • 2 in 3 mobile phones & 3 in 4 smartphones shipped during the quarter were “Made in India”.
  • Almost 7 out of every 10 smartphones shipped were LTE capable.
  • Further 8 out of every 10 LTE capable smartphones were VoLTE ready which is becoming a key feature from marketing perspective for OEMs and carriers.
  • Number of brands shipping more than one million+ smartphones in a quarter almost doubled compared to a year ago from six brand in Q3 2015.
  • Chinese brands are growing in clout and now contributes to almost one out of three smartphone shipments.

Exhibit 1: India Mobile Phone and Smartphone Shipments 3Q 2016

india-chart

Source: Counterpoint Research Market Monitor Q3 2016

*Lenovo Includes Motorola

Vendor Summary:

  • Samsung still dominates the feature phone and smartphone market but its overall market share declined sequentially by 4 percentage points even though it registered a record quarter in shipment volumes in India.
  • Micromax maintained the second spot in smartphone space though closely followed by Lenovo. However, in featurephone segment Micromax was surpassed by Lava which became number one among local brands in featurephone segment.
  • Intex slipped to fourth spot in mobile phone market and in smartphone segment, Intex was surpassed by LYF and Xiaomi, thus being pushed out of the top five rankings.
  • Lava was the fastest growing Indian brand during the quarter with a YoY growth of 8%. During its record quarter, it became the number three mobile phone brand and number one feature phone brand in India for the very first time.
  • Much of the growth was driven due to robust distribution structure and effective service network with emphasis on product quality from marketing perspective.
  • Reliance Jio’s LYF brand climbed up to number four spot benefitting from the commercial launch and attractive trial period offer to consumers.
  • Xiaomi entered in the top five smartphone rankings due to stronger demand for its Redmi Note 3 device which was the second most best-selling smartphone during the quarter.
  • Oppo and Vivo, the star performers in their domestic market continue to exercise their strategy of expanding offline distribution, aggressive promotions and attractive retail margins, saw their shipments grow 272% YoY and 437% YoY respectively during Q3 2016.

Exhibit 2: Smartphone segment by Price Band and Top 2 players

india-chart-2

The comprehensive and in-depth Q3 2016 Market Monitor is available for subscribing clients. Please feel free to contact us at press@counterpointresearch.com for further questions regarding our in-depth latest research, insights or press enquiries.

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.