Desi smartphone brands lose out to China counterparts

The government’s ‘Make in India’ plans seems to have affected home-grown smartphone makers like Micromax, with Chinese companies such as Vivo, Oppo and Xiaomi, making it to the top five in the segment during the fourth quarter of 2016.

Once a No.2 brand and among the top five brands for long in the Indian smartphone market, Micromax has been steadily losing its place over the past year after new entrants, such as Xiaomi and Oppo, launched their latest handsets at competitive prices. Korea’s Samsung remains the top smartphone maker with 25.1 per cent market share, followed by Xiaomi at 10.7 per cent market share and Lenovo Group (includes Lenovo and Motorola) and Oppo at 9.9 per cent and 8.6 per cent, respectively. Vivo ranked fifth with 7.6 per cent market share, International Data Corporation's (IDC) Quarterly Mobile Phone Tracker said on Monday.

It said Xiaomi climbed up to second place during the period and Lenovo slipped to the third, as its shipments to India declined during the calendar year. Oppo made it to the top five and Vivo is yet another Chinese vendor making its debut in the top five.

IDC said Vivo dethroned RelianceJio from fifth place by clocking a healthy 50.8 per cent sequential growth during the fourth quarter with 7.6 per cent vendor share. According to the report, overall smartphone shipments clocked 25.8 million units in the fourth quarter of 2016, registering similar volumes as that of the fourth quarter of 2015, but declining sharply by 20.3 per cent over the previous quarter.

In the calendar year, it registered 109.1 million units of smartphone shipments with a marginal 5.2 per cent annual growth.

This is mainly due to a seasonal decline after an all-time high festival quarter and demonetisation in November, which led to relatively lower consumer sales in November and December.

In the smartphone market, the share of China-based vendors touched a whopping 46 per cent in the fourth quarter of 2016, as their shipments doubled over the same period last year, while the share of home-grown vendors slipped to 19 per cent, it said.

“This is first time when none of the home-grown vendors were able to make their position in top five. The decision of sticking with a 3G-heavy portfolio and prioritising the price game over product experience is working against the dominance of home-grown vendors,” Jaipal Singh, Market Analyst, Client Devices, IDC India, said.

Overall market However, in the overall mobile phone space, three Indian companies are among the top five, as per the report. While the top two are Samsung (26 per cent) and Transsion (a Chinese vendor with 7.5 per cent market share), Intex (7.1 per cent), Lava (7 per cent) and Micromax (5.8 per cent) follow the ranking in that order.

Feature phones remained 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 the calendar year, as compared to 16.2 per cent in previous calendar year. IDC expects 2017 to be a test for the survival for many vendors in the extremely competitive smartphone market, possibly leading to consolidation.

“The feature phone segment is likely to contribute to the majority of mobile phone shipments in 2017; the migration to smartphones is expected to further slow down due to the introduction of low-cost 4G feature phones and its continued relevance to its sizeable target consumers,” Navkendar Singh, Senior Research Manager, Client Devices, IDC India, said.

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