Smartphone sales up 5.2% in Q1: IDC report

With 23.5 million units shipped in India in the first quarter of 2016, smartphones grew 5.2% over the same period last year.

However, the International Data Corporation’s (IDC) Quarterly Mobile Phone Tracker indicates that shipments shrank by 8.2 per cent over Q4 2015, registering a decline for two consecutive quarters, it said in a statement.

Sales of key vendors down

According to Karthik J, Senior Market Analyst, Client Devices, IDC, shipments of key Indian vendors Micromax, Intex and Lava put together dropped 20.4 per cent sequentially. “The first quarter of the year is usually expected to be slow after the festive season in the last quarter of the year. However, the contraction in Q1 2016 is mainly propelled by the decline in shipments from all the top 5 smartphone vendors of previous quarter,” he said.

On the other hand, new entrants like Reliance Jio grew sharply over the previous quarter as they prepare before the official launch, he added.

“LeEco made its entry in Indian smartphone market in Q1 2016 with its Le1S contributing to majority of the vendor’s shipments. Also, key Chinese vendors like Oppo, Xiaomi, Vivo and Coolpad gained traction in the first quarter of the year with new product launches, aggressive marketing spends and expanding their channel presence,” adds Karthik said.

As the “Make in India” campaign continued to promote the local manufacturing in India and over 25 vendors now manufacture smartphones locally, more than two-thirds of the smart phones shipped in Q1 2016 were assembled within the country.

A few vendors who are currently assembling mobile phones in India are likely to start manufacturing components such as batteries, chargers and data cables owing to encouraging support from central and state governments, the statement added. Further, 4G-based smart phones shipments clocked 15.4 million units in Q1 2016, a growth of over 6 times compared to the same period last year.

Jaipal Singh Market Analyst, Client Devices said, “4G based device shipments accounted for 65.5 per cent of overall smartphone shipments in Q1 2016 driven primarily by Samsung’s J-series models. This sharp rise in the share of 4G smart phone is due to the cohesive move from the entire ecosystem.”

Top vendors this quarter

Samsung continues to lead the 4G smart phone market followed by Lenovo and Reliance Jio.

“Qualcomm and Samsung are spearheading this growth while MediaTek along with Chinese and Indian vendors are driving the 4G volume in India. Adding to that, telecom players are playing a pivotal role in setting up the infrastructure and promoting 4G leading to wider awareness of this next gen technology in India,” added Singh.

Samsung continued to dominate the Indian smart phone market with 26.6 percent share, though shipments dipped both year-on-year and sequentially (quarter-on-quarter). Over 75 percent contribution came from its J-series smart phones as they continue to drive volumes for the vendor in both offline and online channels.

Micromax retained second position in Q1 2016 with 6.9 percent growth over the same period last year. However, shipments fell 17.9 per cent sequentially for the second consecutive quarter as volume dipped sharply in the entry level sub-$ 75 segment. With new branding and array of new products announced in Q2 2016, the vendor is likely to recover in coming quarters.

Intex regained its 3rd position, although shipments sequentially declined by 10 per cent in Q1 2016 but grew marginally over last year. Intex’s 4G shipments almost doubled over the previous quarter strengthening its portfolio with over 15 active LTE models.

Lenovo (including Motorola) slipped to fourth position as the shipments declined 35.8 per cent coming off from a sharp spike in the previous quarter. Vendor’s sub-USD150 segment saw a steep decline in the shipments. However, the vendor is likely to see some recovery with the launch of K4 Note and the next generation Moto G in Q2 2016.

Reliance Jio replaced Lava as the fifth largest smartphone vendor with huge shipments of 4G devices. Jio has started building the VoLTE devices base by shipping its LYF branded smartphones in the channels. Jio shipments are expected to grow in the coming quarters owing to launch of its service offerings.

IDC Forecast

Despite the slow start of first quarter of 2016, IDC expects the smart phone market to gain the momentum in the coming quarters. “This year is expected to unfold many transitional phases in the mobile phone ecosystem as more vendors begin local assembling/manufacturing and an increasing trend for higher data consumption owing to affordable 4G devices and data plans,” says Navkendar Singh, Senior Research Manager, IDC India.

With smartphone penetration in the country at still less than 30 per cent, it is one of the most attractive markets in the world.

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