Indian smartphone market expands 14.5 pc in 2018: IDC

Shipment numbers in December 2018 quarter were down 15.1 per cent compared to the July-September 2018 period.

New Delhi: The smartphone market in India grew 14.5 per cent in 2018 with shipment of 142.3 million units, as per research firm IDC.

In the previous year, shipment stood at 124.3 million units. During the December quarter, smartphone shipment expanded 19.5 per cent year-on-year to 36.3 million units from 30.3 million units in the same period the previous year, driven primarily by multiple rounds of sales by e-tailers beyond the festive Diwali period lasting into December.

However, shipment numbers in December 2018 quarter were down 15.1 per cent compared to the July-September 2018 period, owing to high channel inventory.

"Amongst the big highlights of 2018 were the online-focused brands that drove the share of the online channel to an (annual) all-time high of 38.4 per cent in 2018 and a whopping 42.2 per cent in Q4 2018," IDC India Associate Research Manager (Client Devices) Upasana Joshi said.

She added that this was primarily driven by several rounds of discounts by e-tailers driving affordability through various financing options, cashback offers and buyback schemes.

IDC said "the offline channel had a rather muted year with a modest 6.7 per cent annual 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 the e-tailers almost throughout the year," IDC said adding that offline still remains the largest channel for mobile phone distribution in India and is crucial for the long-term success for any brand in India.

IDC Associate Research Director (client devices and IPDS), Navkendar Singh said almost all the brands which were able to find traction in 2018 via e-tailers partnerships have already started their offline foray to establish themselves for the long-term.

"This has become more crucial as the new e-commerce guidelines come into force from 1st February 2019."

Under the new foreign direct investment (FDI) rules for online marketplaces, such e-commerce companies, among other provisions, are barred from exclusive tie-ups with brands.

Xiaomi led the top three players' tally in the fourth quarter and full year (28.9 per cent share for both time periods), followed by Samsung that had 18.7 per cent share in December quarter and 22.4 per cent share in the entire year. Vivo had 9.7 per cent share in the fourth quarter and 10 per cent share for the full year.

IDC said the average selling price remained flat in 2018 at USD 158, with high shipments in the mass segment of USD 100-200 accounting 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 meagre 3 per cent share of the overall smartphone market," Joshi said.

OnePlus emerged as the leader in USD 500-700 segment. 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 YoY growth.

This was primarily driven by Jio Phone shipments through the year, contributing to 36.1 per cent of the overall feature phone shipments, IDC said.

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