The market for 4G devices in India is becoming increasingly affordable and there are around 15 phone models which are available at a price point of Rs 5,000 or lower, a report by Kotak Institutional Equities said.
The report said it is now possible to buy a 4G device for as low as Rs 4,000 (or USD 60) with a 5-inch screen size, 1.1 Ghz quad-core processor, 8GB internal memory, 5MP camera and 2,300 mAh battery, which are good enough entry-level specifications.
"Six-months back the cheapest 4G-enabled smartphone used to cost Rs 7,000 (USD 105) approximately," it added.
The report said smartphone penetration in the country is increasing at a fast pace, driven by increasing availability of devices at an affordable price points offered by a number of local and Chinese phone manufacturers.
In 2015, about 42 per cent of all phones imported in the country were smartphones.
"The large-scale offered by some of these markets has enabled 4G chip manufacturers to produce components at a much lower rate, thereby driving costs of 4G smartphones sharply lower," it added.
The report further said sharp reduction in 4G device prices across the Asia-Pacific region, coupled with the impending entry of Reliance Jio Infocomm has made the Indian telecom companies take notice of the rapidly evolving 4G device ecosystem.
"These operators, as a result (during the second half of 2015), started making aggressive investments in rolling out network infrastructure for high-speed broadband data services, especially 4G. Device manufacturers have responded with increased 4G device launches while also pushing the envelope on lower price points," it added.
As per its analysis, almost 10 per cent of all the devices available in the market are 4G-enabled, the report added.
In the smartphone market, the share of China-based vendors
touched a whopping 46 per cent in the fourth quarter, as their shipments doubled over the same period last year.
On the other hand, the share of homegrown vendors further slipped to 19 per cent.
"This is first time when none of the homegrown vendors were able to make their position in top 5. The decision of sticking with a 3G-heavy portfolio and prioritising the price game over product experience is working against the dominance of homegrown vendors," IDC India Market Analyst, Client Devices, Jaipal Singh said.
Also, the trouble is likely to aggravate for homegrown vendors as China-based vendors have now entered the high volume feature phone market, which has traditionally been dominated by the homegrown vendors, he added.
Feature phones remain the dominant category in the total mobile phone market, with annual shipments of 136.1 million units.
The category declined by only 9.4 per cent in 2016 as compared to 16.2 per cent in 2015.
