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India becomes world's second largest smartphone market

Chinese vendors have fueled demand by driving down the average price of 4G LTE phones in the country, research says

Harichandan Arakali
Published: Feb 3, 2016 04:24:44 PM IST
Updated: Feb 3, 2016 06:49:07 PM IST
India becomes world's second largest smartphone market
Image: Yavuz Sariyildiz / Shutterstock.com
Almost half of the total mobile phones shipped in India during the quarter were assembled in India

India has surpassed the US to become the largest smartphone market in the world after China, by number of units sold, as the availability of 4G handsets fueled demand, a new report has revealed.

Smartphone shipments in India grew a healthy 15 percent annually in the December quarter of 2015 versus the previous quarter and 23 percent on the year-earlier quarter, Hong-Kong-based Counterpoint Technology Market Research said in a press release on Tuesday. In all, India crossed the 100 Million smartphones-sold-in-year milestone at the end of 2015, the research provider said.

“The Indian smartphone demand grew strongly during the holiday season in the Q4 2015 quarter ... more than one in two smartphone shipped was LTE capable,” Pavel Naiya, a research analyst at Counterpoint said in the release. The falling average-selling price of 4G handsets as a host of Chinese vendors compete for market share with market leader Samsung Electronics, is helping fuel demand.

Online sales, which accounted for a third of all smartphones sold in India last year, are also helping widen the smartphone user base in the country.

“India has inched past the US to become the second largest smartphone market in terms of active unique smartphone user base in the world with the base crossing 220 million users,” said Tarun Pathak, a senior analyst at Counterpoint. “This speaks volume for the scale the Indian market provides for any player in the mobile connected ecosystem.”

That India “still has a long way to go as the smartphone penetration of the total potential population is still below 30 percent,” has made it the single most attractive major smartphone market in the world, as markets such as China and US saturate.

India continues to attract new smartphone brands every quarter adding to more than 150 smartphone brands selling their devices in the country. Furthermore, government driven initiatives such as Make in India and Digital India have gained serious momentum in 2015 to attract more players into the mobile value chain, according to the release.

Almost half of the total mobile phones shipped in India during the quarter were assembled in India driving the “Make in India” trend, and Counterpoint expects this trend to accelerate in 2016.

More than 40 percent of the handsets sold in India in the three months ending December 31 were smartphones. Of them, more than one in two smartphones were 4G LTE phones. Almost half of all mobile phones sold during the quarter were “Made in India” with 20-plus mobile phone brands now assembling their phones in India. Domestic brands such as Intex and Lava have considerably narrowed the gap between them and India’s largest local mobile phone company Micromax Informatics, according to Counterpoint.

The quarter also saw rollout of marquee 4G LTE (long-term evolution) services by a couple of network operators, including the soft launch by the much-awaited service by Reliance Jio Infocomm, the research company said.

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