India’s Smartphone Market Records Steepest First Quarter Decline Of 19%: Report

India’s smartphone shipments fell to around 31 million units in the January-March quarter, marking the steepest first-quarter drop of 19 percent on a year-on-year basis, market research firm Counterpoint said on Thursday.

Mobile phones priced below Rs 30,000 saw a sharp decline, while shipments in the premium and ultra-premium categories grew by 60-66 percent.

“This was the biggest Q1 decline ever seen by India’s smartphone market, and the third consecutive quarterly decline. Sluggish demand from 2022, high inventory build-up, growing consumer preference for refurbished phones and a pessimistic channel view of the market contributed to this decline,” Counterpoint’s Market Monitor Service report said.

The contribution of 5G smartphones to the total smartphone shipments has reached a record 43 percent.

“Samsung led the Indian smartphone market for the second consecutive quarter with a 20 percent share. It was also the top 5G brand,” the report said.

Samsung’s new 5G-enabled A series fared well in the offline market, contributing 50 percent of shipments.

Samsung’s ultra-premium segment (price above Rs 45,000) grew by 247 percent in the March 2023 quarter due to the successful launch of the S23 series and financing options, the report said.

Apple grew 50 percent year-over-year and gained 6 percent share in the March 2023 quarter.

Apple maintained its lead in the overall premium segment (Rs 30,000) as well as the ultra-premium segment (above Rs 45,000) with 36 percent and 62 percent shares respectively.

The iPhone maker’s shipments were boosted by its new financing scheme with HDB Financial Services and promotions on the latest iPhone 14 series in offline channels.

“The trend of premiumization is getting stronger with each passing quarter. The share of the premium segment almost doubled in the first quarter of 2023 compared to the first quarter of 2022,” said Prachir Singh, senior research analyst at Counterpoint.

Singh said affordability is key here as more financial schemes are being launched, such as Apple’s ‘No-Cost EMI Offers on the latest premium segment with zero down payment, increase in trade-in offers and push from retailers.

“The growth of the premium segment is reducing the mid-tier segment as consumers are upgrading to higher-priced smartphones,” Singh said.

Rs. 20,000-30,000 mobile phone price range saw a 33 percent decline in shipments, from Rs. 10,000-20,000 segment saw a decline of 34 percent and Rs. Phones priced below Rs 10,000 saw a 9 per cent decline in shipments on a YoY basis.

“We are observing a change in consumer behavior – demand is now concentrated around promotional periods. At the beginning of the quarter, the channels saw an increase in demand around the Republic Day sales period. However, demand dropped significantly after the sales period. Channel players are now focusing on getting rid of existing inventory rather than building new inventory of new models, said Shilpi Jain, senior research analyst at Counterpoint.

She said the quarter’s silver lining came from 5G smartphones, whose contribution (43 percent) surpassed 40 percent for the first time, registering 23 percent year-over-year growth as consumers continue to upgrade to 5G devices.

“We believe these conditions will remain the same in the second quarter of 2023 and growth will return in the second half of the year due to the rapid improvement of 5G upgrades, macroeconomic pressures and the festive season,” Jain said.

Despite a 3 percent year-on-year decline in shipments, Vivo maintained its second position during the reported quarter with 17 percent market share.

Xiaomi experienced a 44 percent year-on-year decline in the first quarter of 2022, falling to third place with a 16 percent share during the reporting quarter.

“Reduction of Rs. Weaker demand in the sub-segment of 10,000 was due to over-reliance on online channels and a confusing portfolio even when demand in offline channels was high. The Redmi Note 12 series has received a positive response from consumers, contributing over 14 percent of Xiaomi’s total shipments,” the report said.

OnePlus was the fastest growing brand in the March 2023 quarter with 72 percent year-on-year growth.

“Among local brands, Lava has a Rs. 10,000 sub-segment did well with its fresh portfolio. Lava continues to offer the cheapest 5G smartphone (Blaze 5G). It was also the third fastest growing brand with 29 percent YoY growth in Q1 of 2023,” the report said.

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(This story has not been edited by News 18 staff and is published from a syndicated news agency feed)