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India Pips US To Become Second-Largest Smartphone Market After China In 2019

India shipped 152.5 million smartphones in 2019, up 8% year-on-year (YoY), overtaking the US to became the second largest smartphone market after China, according to International Data Corporation’s quarterly Mobile Phone Tracker, published on Friday.

Vivo’s continued focus on offline market and price cuts on several models helped it surpass Samsung to become the second largest smartphone vendor in India in 2019. Vivo was the fastest growing vendor in 2019, growing 96.5% on year.

Total mobile phone shipment, which includes both smartphones and feature phones, was at 282.9 million units in 2019, down 12.3% on year due to the roll out of fewer 4G-ready feature phones.

During October-December, 36.9 million smartphones were sold, up 5.5% YoY but down nearly 20.8% sequentially. The report attributed this to heavy channel loading in preparation for the festive season in July-September.

Online channels drove most of the sales in Q4, accounting for 43.3% of total shipment and growing 11.2% YoY. Offline sales grew 1.4% year-on-year.

“The online growth momentum continued through the year with a record share of 41.7% in 2019, growing 18.4% annually due to deep discounts, cashback offers, buyback/exchange schemes, and complete protection offers clubbed with attractive financing schemes like No Cost EMIs across major model line ups and brands,” Upasana Joshi, associate research manager, Client Devices, IDC India said in a press statement.

With annual sales of 43.6 million units, Xiaomi was the market leader growing at 9.2%. Sales were primarily driven by demand for Redmi Note 7 Pro and Redmi 6A – two of the highest selling smartphones of the year.

Smartphones in Redmi 8 series drove most of Xiaomi’s shipments in Q4 2019. Oppo’s sub-brand Realme, which saw phenomenal growth in the late 2018 and early 2019, slipped to the fifth spot in Q4 2019. Samsung was at the third spot and Oppo at fourth in Q4 2019.

The average selling price of smartphones in India in 2019 was $163 with under $200 segment accounting for 79% of the total shipment.

The share of mid-range segment was 19.3%, while in the mid-premium ($300-$500) segment, Vivo with 28% and OnePlus with 20.2% market share were the main vendors.

In the premium ($500 and above) segment, Apple displaced Samsung from the number one spot, grabbing 47.4% of the market share.

Apple’s success was reportedly driven by aggressive price cuts of previous generation models, bank offers, strong e-tailer sales momentum, and attractive pricing of the iPhone 11.

With shipment of 30.1 million units in 4Q19, feature phone market declined 21.1% on year. The 699 Diwali offer by Reliance Jio during the October festival season enabled the telecom major to clear off existing channel inventories of 4G phones.

According to Navkendar Singh, research director, Client Devices & IPDS at IDC India, year 2020 will not be any different and the smartphone market will likely see modest single digit growth.

“As organic growth becomes challenging with increasing replacement cycles, it is imperative for the smartphone ecosystem to really put its energy and focus on enabling migration of the massive feature phone user base in India,” Singh said in a press statement.

Singh feels, 2020 will see smartphones with newer concepts like under-display cameras, features aimed at gamers like screens with 90-120Hz refresh rate in addition to brands trying to explore new revenue options like monetisation of operating system, perhaps along the lines of ads by Xiaomi.―Livemint

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