In a first, India might see share of premium smartphones rise to 20%

Indians, once considered a price-sensitive lot, are fast shedding that tag — at least in the mobile handset space. If the estimates are to go by, more consumers are expected to buy costlier handsets in 2019. This is despite a probable dip in the entry-level smartphone business.

According to an estimate by TechArc, an analyst firm, the sale of premium (Rs 25,001 to Rs 50,000) and luxury (above Rs 50,000) smartphones is expected to grow at 4.6 per cent and 2.2 per cent, respectively. 

This growth is in contrast to that of the basic- and entry-level smartphones that, till recently, drove the bulk of the growth. While the sale of basic (less than Rs 5,000) smartphones is expected to dip 2.4 per cent, the market for entry-level handsets (Rs 5,001 to Rs 10,000) may contract 3.1 per cent.

For the first time in the country, the share of premium handsets in the overall smartphone market is expected to rise to 20 per cent. While, luxury phones — mostly represented by Apple’s iPhone 8, 8S, X-series, Samsung’s Galaxy S and Note series, and Google Pixel — could capture 10 per cent of it. The cumulative share of basic and entry-level handsets may drop to 20 per cent from 28 per cent in 2018. According to Faisal Kawoosa, chief analyst, TechArc, the rise in the sale of costlier handsets is mainly driven by repeat buyers, who are well versed with the smartphones and are upgrading their lifestyle.

 The growth in the trend of consumers opting for costlier handsets is evident from the sales projection for the mid-segment (Rs 10,001 to Rs 25,000). The segment is expected to grow the fastest at 11.6 per cent and may capture more than half of the market — to 51 per cent, up from 46 per cent — for the first time.

The uptick in sales of premium and luxury smartphones comes at a time when Apple's iPhone, one of the key players, is going through a rough patch in the country. According to data from Counterpoint Research, last year, its shipments plunged 47 per cent to 1.7 million units from a peak of 3.2 million units in 2017.

TechArc estimates show, that despite a decline in Apple’s fortunes, brands such as OnePlus, Vivo, Oppo and Honor would drive the sales in 2019. In 2018, OnePlus emerged as the top player in India’s premium segment, and its success solidified its position in the global market. It emerged as the largest player in the global $400 to $600 band. Moreover, Samsung and Google can replace Apple as the growth driver in the luxury segment in India.