India's Smartphone Market Shows Resilience with Shift to Premium Models

Sunday, May 12, 2024 Edit this post

By IndraStra Global News Team

India's Smartphone Market Shows Resilience with Shift to Premium Models

India's second-largest smartphone market globally has shown promising signs of recovery after experiencing two consecutive years of decline. Contrary to increased handset sales, the resurgence is attributed to the successful marketing of higher-priced models.

The success of this quarter highlights the smartphone industry's adaptability and resilience amidst challenging economic climates. While the focus has shifted towards selling premium models, this reflects a strategic move by companies to capitalize on changing consumer preferences and purchasing power. As per Counterpoint’s Consumer Lens survey, over a third of mid-tier consumers express readiness to transition to the premium segment. This inclination is influenced by accessible financing options, enhanced trade-in value propositions, and bundled deals, alongside the desire for advanced features like AI capabilities, gaming enhancements, and improved imaging technology.

In the first quarter of 2024 (January-March), India saw an 8% year-on-year increase in smartphone shipments by volume and an 18% increase by value, as per the latest findings from Counterpoint's Monthly India Smartphone Tracker. The rise in volume was mainly due to sufficient inventory levels and the comparatively low base of Q1 2023.  Meanwhile, the surge in value was propelled by the ongoing trend of premiumization and the introduction of new models such as the Samsung Galaxy S24 and OnePlus 12 series. Notably, the premium segment (devices priced over INR 30,000) reached its highest-ever volume share at 20% and commanded 51% of the total Indian smartphone market value in Q1 2024.

On the other hand, Nothing emerged as the fastest-growing brand with an impressive 144% year-on-year increase, attributed to the success of its new mid-segment model, Nothing (2a), which garnered substantial attention. Motorola followed closely with a 58% year-on-year growth, driven by consumer demand for improved CMF (color, material, finish) in smartphones and its user-friendly stock Android experience. Xiaomi secured the second position with a 28% year-on-year growth, thanks to its streamlined product portfolio and proactive offline channel strategy.

Transsion brands experienced a 20% year-on-year growth, capitalizing on an increased focus on offline sales and offering premium specifications in the affordable segment. Similarly, realme witnessed an 18% year-on-year growth in Q1 2024, propelled by its latest number series targeting young consumers through advanced camera capabilities and premium design aesthetics.

Looking ahead, the Indian smartphone market is expected to continue growing in single digits throughout 2024, driven by factors such as increasing premiumization, widespread adoption of 5G technology, and post-COVID upgrades. Notably, in Q1 2024, 5G smartphone shipments in India reached their highest-ever share, accounting for 71% of total shipments. In terms of chipset market share, MediaTek led the overall market with 53%, while Qualcomm dominated the premium segment with a 35% share. Additionally, offline sales accounted for 64% of total smartphone sales in Q1 2024, marking a significant increase from previous quarters and indicating a strong post-COVID recovery in offline retail channels.

Overall, Samsung, Xiaomi, and Vivo's strong performance in this quarter indicates their ability to understand market dynamics and effectively cater to evolving consumer demands. Their success not only bodes well for their respective brands but also signals a positive trajectory for India's smartphone market as a whole.

However, despite the challenges posed by the pandemic and economic uncertainties, the steadfastness exhibited by the smartphone industry highlights its significance as a catalyst for economic growth and innovation in India. The industry's recovery is expected to have broader implications beyond revenue growth, including job creation, technological advancements, and increased competition, ultimately benefiting consumers with a wider range of options and improved quality.

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IndraStra Global: India's Smartphone Market Shows Resilience with Shift to Premium Models
India's Smartphone Market Shows Resilience with Shift to Premium Models
By IndraStra Global News Team
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