Smaller cities to spearhead smartphone growth in India: IDC

With the growing appeal and penetration of smartphones, tier 2 and 3 cities will spearhead the next wave of growth for the Indian smartphone market, the latest report from the International Data Corporation (IDC) has predicted.

According to the "Monthly City Level Smartphone Tracker" report released on Thursday, the leading 30 cities of India make up approximately 51 percent of the smartphone market in the fourth quarter of 2015.

While New Delhi generated the maximum demand, Mumbai followed it closely in that period.

Twenty five major tier 2 and 3 cities currently make up around 21.3 percent of the Indian smartphone market, said the report, adding that most of the demand in smaller cities is for 3G models but with increasing 4G smartphone portfolio across all brands, the demand for 4G smartphones is expected to grow exponentially.

"The smartphone consumers in tier 2 and 3 cities are becoming more aware and demanding. The 4G revolution is promising to trigger the next wave of smartphone growth with 4G enabled devices already overtaking 3G devices as the largest smartphone category," said Jaideep Mehta, managing director, IDC South Asia.

There is a clear trend of migration from feature phones to low-end smartphones in smaller cities and towns, making these markets the next growth engine for the smartphone industry.

"With the first time mobile phone users coming on a smartphone, it will be their only connected device which meets all of their internet and entertainment needs" added Swapnil Bhatnagar, research director, IDC India.

Chinese vendors like Lenovo, Motorola and Xiaomi are gaining market share in these cities "due to their superior positioning as quality brands, with a value for money proposition," Swapnil noted.

The top five cities of India make up nearly 60 percent of the online smartphone sales in India, the report added.