As per IDC’s Asia/Pacific Quarterly Mobile Phone Tracker, India smartphone market shipped 142.3 million units in 2018, registering a healthy 14.5% year-on-year (YoY) growth as compared to 2017.
After a strong quarter of 2018Q3, the smartphone market saw a sequential decline of 15.1% in 2018Q4 owing to high channel inventory, but saw a healthy annual growth of 19.5%, driven primarily by multiple rounds of sales by e-tailers beyond the festive Diwali period lasting into December.
“Amongst the big highlights of 2018 were the online-focused brands that drove the share of the online channel to an all-time high of 38.4% in 2018 and a whopping 42.2% in 2018Q4. This was primarily driven by several rounds of discounts by e-tailers driving affordability through various financing options, cashback offers and buyback schemes. Shipments of the online-exclusive portfolios of Xiaomi, Honor, Realme, Asus, OnePlus etc., further fueled this growth, resulting in a year-on-year growth of 47.3% in 4Q18 for the online channel,” said Upasana Joshi, Associate Research Manager, Client Devices, IDC India.
However, the offline channel had a rather muted year with a modest 6.7% annual growth in 2018 and growing 5.0% sequentially in 2018Q4. The offline channel was unable to keep pace with the deep discounts and go-to-market initiatives from the e-tailers almost throughout the year. Having said that, offline remains the largest channel for mobile phone distribution in India and is crucial for the long-term success for any brand in India.
With the government initiative to push local manufacturing in India, 2018 witnessed further duty hikes on mobile phone components, coupled with weakened rupee further added to the challenges of the long tail of brands outside the Top 5.
The overall smartphone average selling price remained flat in 2018 at US$158, with high shipments in the mass segment of US$100-US$200 which accounted for more than half of the smartphone market in India. Commenting on the price segment trends, Joshi further adds, “The premium end of the market (above US$500) outgrew all other price segments in 2018 with 43.9% YoY growth, although it still constitutes a meager 3% share of the overall smartphone market. OnePlus emerged as the leader in US$500-US$700 segment on the back of the OnePlus 6 and the newly-launched OnePlus 6T. However, in the super premium segment of US$700+, Samsung surpassed Apple for the top position with its Galaxy S9 series.” adds Joshi.
The feature phone market, which makes up 56.0% of the total mobile phone market clocked 181.3 million-unit shipments in 2018, with 10.6% YoY growth. This was primarily driven by Jio Phone shipments through the year, contributing to 36.1% of overall feature phone shipments. The 2G/2.5G market declined by 23.0% YoY in 2018 owing to high demand for 4G enabled feature phones in the market.