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India’s feature phone shipments doubled in Q1 2018, smartphone market stayed flat

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In a somewhat surprising shift in the market, shipments (sold to retailers) of feature phones in India have doubled in the first quarter of 2018 (Q1 2018) year-on-year while the smartphone market remained flat in the same period. Overall, the Indian mobile phone market grew by 48% YoY in Q1 2018. These findings were published by research firm Counterpoint Research.

The growth in feature phone category was driven by the increasing popularity of the JioPhone. According to the report, Jio now captures more than one-third (in terms of shipment) of the total featurephone market – the highest ever in a single quarter, since what Nokia achieved at its peak. The phone has shown surprising growth in a world dominated by smartphones, since it was launched in July 2017. Within half a year of its launch (by December 2017), it managed to become the top feature phone brand in India by shipments, overthrowing market leader in the segment Samsung. This is in part because of the deal it offers: the phone is effectively free, available for a refundable deposit of Rs 1500.

Samsung stood second in the category, but its market share reduced drastically—from 25.4% in Q1 2017 to 9.8% in Q1 2018. Itel was the third largest player in the feature phone segment with 17% growth YoY in Q1 2018.

Smartphones

Xiaomi continued to be the highest-selling smartphone brand in India this quarter in terms of shipment, and showed a quarterly increase in its market share by 6%—touching 31% in Q1 2018 from 25% in Q4 2017. Samsung was the second in this category as well, with a 26% market share.

It was followed by Vivo and Oppo, and Honor (Huawei) climbed to the fifth spot.

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Speaking of the flattened growth of the segment, Karn Chauhan, Research Analyst at Counterpoint said, “The quarter was marked with less than normal smartphone launches as very few brands refreshed their portfolio, except for Xiaomi and Samsung which benefitted from the new launches. However, we expect the demand to start picking up from early Q2 2018 onwards, driven by faster replacement rate of existing 2G and 3G smartphone users upgrading to 4G mobile phones.”

The performance of Chinese brands remained strong, accounting for 57% of the total smartphone market in Q1 2018, up from 53% during Q1 2017. This is the highest ever contribution by Chinese players in the Indian smartphone market.

Some other findings:

  • Honor (146%), Xiaomi (134%) and OnePlus (112%) were the fastest growing smartphone brands in Q1 2018.
  • Premium segment remained flat YoY during Q1 2018. Samsung grabbed the top position in the premium segment
  • OnePlus maintained the second position in the segment with one-fourth share of the total premium smartphone market.
  • 96% of the smartphones were assembled or manufactured locally due to increased focus on the Make-In-India program and rising import duties.

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