The Indian smartphone market saw shipments of 142.3 million units in 2018, registering a healthy 14.5 per cent year-on-year (YoY) growth compared to 2017, according to IDC’s Asia-Pacific quarterly mobile phone tracker report.
However, after a strong third quarter for the year, the smartphone market saw a sequential decline of 15.1 per cent in the October-December period of 2018 owing to high channel inventory, but saw a healthy annual growth of 19.5 per cent driven primarily by multiple rounds of sales by e-tailers beyond the festive Diwali period lasting into December.
“Amongst the big highlights of 2018 were the online-focused brands that drove the share of the online channel to an all-time high of 38.4 per cent in 2018 and a whopping 42.2 per cent in Q4 of 2018. This was primarily driven by several rounds of discounts by e-tailers driving affordability through various financing options, cashback offers and buyback schemes. The shipments of the online-exclusive portfolios of Xiaomi, Honor, Realme, Asus, OnePlus etc., further fueled this growth, resulting in a year-on-year growth of 47.3 per cent in Q4 of 2018 for the online channel,” said Upasana Joshi, Associate Research Manager, Client Devices, IDC India.
However, the offline channel had a rather muted year with a modest 6.7 per cent growth in 2018 and growing 5 per cent sequentially in Q4 2018. The offline channel was unable to keep pace with the deep discounts and go-to-market initiatives from e-tailers almost throughout the year.
IDC also said offline remains the largest channel for mobile phone distribution in India and is crucial for the long-term success for any brand in India. With the government’s initiative to push local manufacturing in India, 2018 witnessed further duty hikes on mobile phone components. This, coupled with a weakened rupee, further added to the challenges of the long tail of brands outside the Top 5.
The overall smartphone average selling price remained flat in 2018 at USD 158, with high shipments in the mass segment of USD 100-USD 200 which accounted for more than half of the smartphone market in India. “The premium end of the market above USD 500 outgrew all other price segments in 2018 with 43.9 per cent YoY growth, although it still constitutes a meager 3 per centt share of the overall smartphone market. OnePlus emerged as the leader in USD 500-USD 700 segment on the back of the OnePlus 6 and the newly-launched OnePlus 6T. However, in the super premium segment of USD 700+, Samsung surpassed Apple for the top position with its Galaxy S9 series.” added Joshi.
The feature phone market, which makes up 56 per cent of the total mobile phone market clocked 181.3 million-unit shipments in 2018, with 10.6 per cent growth. This was primarily driven by Jio Phone shipments through the year, contributing to 36.1 per cent of feature phone shipments.