Smartphones Q3 shipment crosses 30 mn mark: IDC

Smartphone market in India crossed the 30 million unit shipments milestone in the third quarter of 2016 maintaining its healthy traction with 11 percent year-on-year growth. According to the International Data Corporation's (IDC) Quarterly Mobile Phone Tracker, smartphone shipments clocked 32.3 million units in Q3, marking a 17.5 per cent growth against the previous quarter. 

“This seasonal spike in the third quarter of the year can be attributed to the channel preparation for the festive season, mega online sales and early import of smartphones owing to Chinese holidays in October,” said Karthik J, senior market analyst, client devices, IDC India. 

IDC expects the year to end with a higher annual growth, considering the improved performance of smartphones in the third quarter. “Entry of new vendors have extended the feature phone supply since past few quarters. However, with expected entry of Reliance Jio in the feature phone market, the category is expected to grow significantly. This, in turn, might further slow down the feature phone to smartphone migration,” said Navkendar Singh, senior research manager, IDC India.

Online share of smartphone increased to 31.6 per cent with impressive 35 per cent quarter-on-quarter (QoQ) growth due to strong performance by key online players primarily from China-based vendors. Also, closing weeks of the quarter witnessed incremental supplies as many vendors were preparing their inventories for the online festival sales in October. 

Lenovo Group, accounting for around one-fourth of the total online shipments of smartphones, continues to lead the online channel followed by Xiaomi, whose online sales is fuelled by its Redmi series, including the newly launched Redmi 3S, added Karthik. 

4G smartphone shipments grew 24.8 per cent over the second quarter. One of the major factors behind this is the rollout of Reliance Jio network. In fact, seven out of 10 smartphones shipped during Q3 were 4G-enabled. Adding to this, nine out of 10 handsets sold by eTailers were 4G. 

Samsung leads the Indian smartphone market with 23 per cent share and an 8 per cent sequential growth. Despite the recall of Samsung’s flagship Note 7, multiple new launches in offline and online channels have added to its strong portfolio with Samsung's J2 continuing to be a key contributor in terms od sales, said IDC.

Lenovo Group climbed to the second place with a 9.6 per cent share in the smartphones market. Lenovo Group’s shipment spiked registering a growth of 46.1 per cent over the previous quarter in 2016.

Meanwhile, Motorola’s volume almost doubled QoQ, being driven by the newly launched E3 Power and G4 models. K5 series continues to be lead runner for Lenovo accounting for over 40 per cent of its total volume. 

Micromax was dropped to the third position with a 32 per cent decline in smartphone shipments over the previous quarter. Vendors are facing tremendous pressure from local sellers in the $100 sub-segment, while Chinese players are also posing a stiff competition for those handsets that are priced within the range of $100 and $150.

Xiaomi made its debut in the top 5 as its shipments doubled over previous quarter. With its primary focus on online and minimalistic product portfolio, the vendor has grown more than 2.5 times as compared to in the corresponding period last year. As the vendor plans to expand its footprint in the offline channel, competition is likely to intensify in Indian smartphone market. 

Reliance Jio sustained its fifth position, despite a healthy 20.9 per cent growth over previous quarter. With the commercial launch of Reliance Jio service, the LYF branded smartphones saw a sharp demand. Apart from its entry level Flame series, Water series also contributed to the growth.

Mobile Phone Market Highlights

• Overall mobile phone market shipments closed at 72.3 million units in Q3 this year with an 18.1 per cent sequential growth. 

• Feature phones registered 39.9 million units with a healthy 18.6 per cent quarter-over-quarter growth.

• However, feature phones market declined at 12.4 per cent over the same period last year, pulling down the overall mobile phone shipments marginally by 3.3 per cent. 

• Migration from feature phone to smartphone has slowed down, helping India-based vendors to maintain their dominance in overall mobile market. Though the feature phone market is consolidated with few key vendors, it is also witnessing the emergence of new brands.