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Is premium category a saving grace for India's shrinking smartphone market?

While global smartphone sales, including in India, are declining, the premium category smartphones are picking up pace and are seen as a saving grace for the country's overall shrinking market

Photo: Bloomberg

Photo: Bloomberg

Udisha Srivastav New Delhi

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As a large part of India’s phone market is dominated by entry-level handsets users, the number has recently witnessed a sharp decline, data from the analysis firm Counterpoint shows. The share of this segment shrunk from 36 per cent in 2018 to 12 per cent in 2022. The entry-level handsets are usually priced under Rs. 8,000. Overall, smartphone shipments declined to 1.2 billion units in 2022 worldwide, the lowest since 2013.

Counterpoint Research, in its latest Market Monitor report said, while India’s smartphone shipment witnessed a 9% year-over-year (YoY) decline, the share of the premium smartphone segment jumped to register itself into double-digit numbers for its maiden time.

Similar trend was noted by the market intelligence firm International Data Corporation. In its Worldwide Quarterly Mobile Phone Tracker report, the country recorded the lowest third-quarter shipment since 2019 in July-September 2022, as it shipped only 43 million units overall. The report, released in November 2022, said that even though the time marked an onset of festivities, the slow demand and skyrocketing prices of smartphones impacted the festive purchases.

Some other factors behind the dwindling smartphone sales in India are low shipments, looming market uncertainties, a cooling down of consumer spending, continuing inflation, rising interest rates, geopolitical tensions in the world, and slow migration from feature phones to smartphones. Thus, tracing the trends and patterns of smartphone sales in India, it can be annotated while overall sales of smartphones are shrinking, the premium category smartphone sales are showing an upward trend.

In 2022, South Korean smartphone maker Samsung was the only brand in the top five ranks whose sales didn’t witness a slump. In fact, it topped the list of 5G smartphone brands in the year, capturing a market share of 21 per cent. The brand also replenished its A series and revamped its sales by offering discounts during the festive season. It was a crucial factor that drove the growth of its premium segment, which ranges between Rs 30,000 and Rs 45,000. The brand was also the fastest-growing in the ultra-premium segments, which range above Rs 45,000, data from the market research firm Canalys reveals.

Based on the Counterpoint Research insights, the Apple brand registered a 16 per cent (YoY) growth in 2022. In both the premium and ultra-segment segments, the brand maintained its dominance. Moving ahead, Chinese smartphone maker OnePlus grew 50 per cent YoY last year. As a result, it was placed in the number two position in the affordable premium segment. Overall, it held a market share of 22 per cent.

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First Published: Mar 27 2023 | 5:08 PM IST

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