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The India Mobile Handset Reports Confusion: G’Five Number Two; Samsung Disputes IDC Info

Market research firm IDC’s  report on mobile handset sales in India during Q3 2010 took everyone by surprise, as it listed Chinese handset maker g’Five at the second spot with a market share of 10.6% , overtaking the likes of Samsung, Micromax and LG. According to the report, Nokia has the largest market share of 31.5% in terms of unit shipments, while  Samsung was at number three with a market share of 8.2%. Following the report, Ranjit Yadav, Samsung’s country head for mobile & IT,  slammed the IDC report, and told The Economic Times, that the company will challenge the data.

This is not the first time when IDC data has been disputed by a manufacturer: Nokia, which has been reported to be losing marketshare in India over the past year, disputed IDC data in November, with Nokia India MD D Shivakumar telling the Economic Times in September that the figures were way off the mark and the shipments cited by IDC were not equivalent to actual sales and market shares. He had also added that that IDC did not count shipments from Nokia’s Chennai factory.

Now if IDC takes into account only shipments made to a country, rather than actual sales then it would be incorrect to treat this as marketshare: for example, g’Five can choose to flood the Indian handset market with its handsets, but this doesn’t necessarily mean that the handsets are selling. A company that easily game this  format of reporting model by shipping more handsets in a particular quarter. Shipments are an indication of supply in the market, and not necessarily demand (or sales).

Interestingly, there is a huge disparity in the reports of IDC and its rival GFK-Nielsen which provides handset sales and market share data to its clients. The Economic Times, which got the GFK-Nielsen data from one of its clients,  reports that the GFK report positions Nokia at the top with a market share of 44.8% followed by Samsung which has a 17.8% share. g’Five trails behind LG and Micromax at the fifth spot with a market share of just 3.7%. IDC and GFK-Nielsen use different methodologies to track handset sales. While IDC takes into account unit shipments, GFK tracks retail sales through a substantial panel of retailers.

Smart Phone Rise

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According to IDC, the Indian handset market grew by 3.6% in Q3 over Q2 2010 and 40.08 million handsets were sold. It estimates that a total of 155.9 million units were sold in 2010.

India is also picking up in Smart phone sales and IDC recorded a 34.2% quarter-on-quarter growth and a 294.9% year-on-year  growth. The report also talks about the rise of the Android platform, which now has a market share of 9.4% amongst all smartphones, over its previous year’s share of 2.9%. This certainly is an encouraging trend for Indian handset makers like Micromax who have launched budget Android phones in the market.

Laptops Sales Increase

More Indians bought laptop computers in 2010 if one compares to 2009. In its quarterly PC tracker report, IDC reveals that the market for laptops has grown by 60% in one year’s time.  PC sales in India have grown by 31% in the first three quarters of 2010,  compared to the same period during the previous year and stands at 7.4 million units. This included 4.68 million desktops and 2.72 million laptops.

Sumanta Mukherjee, Lead PC analyst at IDC credits mini notebook PCs /netbooks in improving the overall growth of the market and says that most of the growth came from the consumer segment. The report also said that more people will choose notebooks as their first computers in 211. The Cost of desktop PCs and laptops is also expected to go down by 13% and 5% respectively. However, he feels that it is unlikely that notebook PC shipments will overtake that of desktops in 2011.

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