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Global smartphone market to dip, but India sales will grow 28%: reports

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Worldwide smartphone sales are expected to slow down in 2016, and will no more grow in double digits, research firm Garner said in a statement. But this isn’t the case in India: Gartner estimates that 139 million smartphones will be sold in India in the year 2016, growing 29.5 % y-o-y. Last year alone (FY15), Indian smartphone shipments grew by a significant 28.8% to 103.6 million units, positioning India as one of the fastest growing smartphone market in Asia Pacific, IDC said in a report. 

Gartner added that worldwide smartphone sales are expected to grow by just 7% in 2016 to reach 1.5 billion units. This is down from the 14.4% growth reported in 2015.

Why smartphone sales are dipping globally, but not in India

According to Gartner, the global dip in smartphone sales is mainly because most individual smartphone markets have reached almost 90% penetration. In the mature markets of North America, Western Europe, Japan and Asia/Pacific, smartphone sales are dipping, and in these regions users are not replacing or upgrading their devices as often in previous years, added Gartner.

“In the mature markets, premium phone users are extending life cycles to 2.5 years, which is not going to change drastically over the next five years…most users are happy to hold onto their phone for two years or longer than before. They do so especially as the technology updates have become incremental rather than exponential,” says Gartner.

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And since these markets are saturated, smartphone makers are increasingly targeting India and Chinese markets. While, sales in these markets will be driven by a lower Average Selling Price (ASP), which currently remains under $70 in India, according to Gartner.  However, smartphones under $120 will continue to contribute around 50% of overall smartphone sales in 2016, added Gartner.

Existing players will face competition from newer brands

Interestingly, Gartner points out that although existing smartphone makers may gradually phase out shipments in saturated markets and move to the emerging markets, they will still face competition from newer or upcoming brands “Some will exit the market while newcomers, including mobile manufacturers or internet service providers from China and India, could make their debut,” added the research firm.

According to CMR research, in India, emerging smartphone brands—those which were launched after 2013—accounted for 15.2 million smartphone shipments in 2015. This number is set to double at 32.5 million units by the end of FY16, capturing a significant 25% of the Indian market. In 2015, Xiaomi led the emerging brands market followed by Gionee and Panasonic with 23.6%, 14.7% and 11.3% market shares, respectively.


What is more interesting is the fact that the number of new brands entering India dropped from 74 brands in 2013 to just 21 in 2015, but their overall contribution to the Indian smartphone market increased exponentially, according to CMR. In 2013, emerging brands contributed to just 3% share, which increased to a staggering 16% in 2015.

Platform share in India: As per a Strategy Analytics report, among the 31 million smartphones shipped in India during Q2 2016, Android devices accounted for 97% of them (29.8 million), while iOS devices shipments fell to just 2.4% (0.8 million units). Note that Apple held a higher 4.5% share in the same quarter last year (Q2 2015), selling at least 1.2 million units at that time.

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