India’s smartphone market rebounds in Q3 2020

“Smartphone vendors are definitely bullish,” said Canalys Analyst, Adwait Mardikar. “The government, slowly but surely reducing restrictions on movement after a three month lockdown, has created the perfect atmosphere for sustained growth. While almost all vendors have shown positive shipment growth, the true winners are the online channels, who have been buoyed with a huge influx of devices ahead of the festive season. Ongoing sales at Amazon and Flipkart are a clear indication that despite the economic downturn, India’s penchant for a good smartphone, and a good bargain, remains intact.”

“Ongoing tension between India and China has been a hot topic in the past few months, but we have yet to see a significant impact on purchase decisions of mass market customers,” said Canalys Research Analyst, Varun Kannan. Collectively, Chinese vendors comprised 76% of total smartphone shipments this quarter, which has grown from 74% a year ago. “However, the tensions have caused Chinese smartphone brands to act more conservatively in recent months, reducing their marketing spend, and carefully trying to project the image that they are important contributors to, and stakeholders in, the economic future of India.”

Apple regained momentum in India in Q3, with double-digit growth to nearly 800 thousand units. “Apple is finally paying attention to India,” said Canalys Research Director, Rushabh Doshi. “It has opened a direct online store, giving it several new angles in its go-to-market strategy, such as utilizing device trade-ins to provide purchase incentives, or bundling AirPods with iPhones to make them more appealing. However, its new iPhone 12 family will be a tough sell in India this year, as network operators do not yet have the infrastructure for mass market 5G deployment, erasing a key feature of the devices. Not to forget, Apple’s pricing strategy for its new iPhones in India needs serious consideration.”

“The impact of COVID-19 in India has been a dichotomy of sorts,” added Mardikar. “The lockdown forced most of working India to stay at home and refrain from big-ticket spending on travel, food and beverages, increasing the overall dispensable income. On the other hand, unemployment has risen, impacting the lowest rungs of society most, and affecting the long-term outlook of India’s smartphone market. As much of India remains physically disconnected, the smartphone has increasingly become a necessity not only for social connection, but also for entertainment, education, banking, payment and more. Vendors in it for the long run must acknowledge their responsibility in uplifting the country, and helping India emerge out of COVID-19 as swiftly as possible.”

CT Bureau