Smartphone shipments dip 8.2% in Jan-Mar

However, shipments up 5.2% on y-o-y basis, as per IDC data; despite slow start, market to gain momentum going forward

India’s smartphone shipments shrank 8.2 per cent during the first three months of 2016 (calendar year) to 23.5 million units compared to the October-December 2015 period.

However, shipments showed a 5.2 per cent growth on a year-on-year basis, according to International Data Corporation (IDC)’s Quarterly Mobile Phone Tracker. Despite the slow start of the first quarter of 2016, IDC expects the smartphone market to gain the momentum in the upcoming quarters.

IN A NUTSHELL

• Shipments showed a 5.2% growth on a year-on-year basis
• Smartphone penetration less than 30% in the country, making it one of the most attractive markets
• Shipments of Micromax, Intex and Lava put together dipped 20.4%  sequentially

“This year is expected to unfold many transitional phases in the mobile phone ecosystem as more vendors begin local assembling/manufacturing and an increasing trend for higher data consumption owing to affordable fourth generation (4G) devices and data plans,” says Navkendar Singh, senior research manager at IDC India.

Smartphone penetration is still at less than 30 per cent in the country, making it one of the most attractive markets in the world. “While the new entrants continue to make Indian mobile market more competitive, vendors differentiating themselves with value-added services could be expected this year,” Singh adds.

The sequential drop in shipment was evident across vendors. Shipments of key Indian vendors Micromax, Intex and Lava put together dropped 20.4 per cent sequentially as they struggled to push their inventories into the market.

“The first quarter of the year is usually slow after the festive season in the previous quarter. However, the contraction in Q1 2016 is mainly propelled by the decline in shipments from all the top five smartphone vendors of the previous quarter,” says Karthik J, senior market analyst (client devices) at IDC.   

On the other hand, new entrants such as Reliance Jio grew sharply over the previous quarter as they prepare before the official launch.

LeEco made its entry in Indian smartphone market in Q1 2016 with its Le1S contributing to a majority of the vendor’s shipments. Also, key Chinese vendors such as Oppo, Xiaomi, Vivo and Coolpad gained traction in the first quarter of the year with new product launches, aggressive marketing spends and expanding their channel presence,” adds Karthik.

The “Make in India” campaign continued to promote the local manufacturing in India as around 25 vendors are now manufacturing smartphones locally in India.

Two-thirds of the smartphones shipped in the first quarter of 2016 were assembled within the country. A few vendors who are currently assembling mobile phones in India are likely to start manufacturing components such as batteries, chargers and data cables thanks to the support of central as well as state governments.

Shipments of 4G-based smartphones clocked 15.4 million units in the quarter under review, growing six-fold over the year-ago period.

Jaipal Singh, market analyst (client devices) at IDC, says: “4G-based device shipments accounted for 65.5 per cent of the overall smartphone shipments in Q1 2016 driven primarily by Samsung’s J-series models. This sharp rise in the share of 4G smartphone is due to the cohesive move from the entire ecosystem."

Samsung continues to lead the 4G smartphone market followed by Lenovo and Reliance Jio.

“Qualcomm and Samsung are spearheading this growth, while MediaTek along with Chinese and Indian vendors are driving the 4G volume in India. Adding to that, telecom players are playing a pivotal role in setting up the infrastructure and promoting 4G leading to wider awareness of this next-gen technology in India," adds Jaipal Singh.

Vendor ranking
Samsung continued to dominate the Indian smartphone market with 26.6 per cent share, despite shipments dipping both year-on-year and quarter-on-quarter. The contribution of its J-series smartphones was around 75 per cent as they continued to drive volumes for the vendor in both offline and online channels.

Micromax retained the second position in the first quarter of 2016 with 6.9 per cent growth over the year-ago period. However, shipments fell 17.9 per cent sequentially for the second consecutive quarter as volume dipped sharply in the entry-level sub-$75 segment.

Intex regained its third position. Although its shipments sequentially declined 10 per cent in the Q1 of 2016, it grew marginally over that of 2015. Intex’s 4G shipments almost doubled over the previous quarter, strengthening its portfolio with 15 active long-term evolution or LTE models.

Lenovo (including Motorola) slipped to the fourth position as the shipments declined 35.8 per cent coming off from a sharp spike in the previous quarter. Vendors' sub-$150 segment saw a steep decline in the shipments.

Reliance Jio replaced Lava as the fifth largest smartphone vendor with huge shipments of 4G devices.