India Will Be the Next Big Growth Smartphone Country as China’s Market Matures

Wednesday, October 28, 2015

As the biggest manufacturing base of global smartphone, China has been the engine of global smartphone growth in recent years, accounting for almost 25 percent of smartphone sold over the globle. However, China’s smartphone market is maturing, according to a mobile phone report from IDC, the growth of smartphone shipment is just expected to 1.2 percent in 2015, far down from 19.7 percent in 2014. China is joining North America and Western Europe in a slower growth pattern, and the focus will be more on smartphone exports than consumption along with the domestic growth slows significantly. Finally, it is estimated that China’s overall share of global smartphone market will be dropped to 23.1 percent by 2019 as the high-growth India expand.

India is experiencing a rapid growth in smartphone market, from about 88 million units in 2014 to an estimated 118 million units in 2015. And the market is expected to continue to grow in double-digits over the next years, by 2017, India will overtake USA to be the second largest smartphone globally and the overall market share will be about 10 percent in 2019.

Smartphone Shipment Share

Right now, only minority groups of Indian are using smartphones, such as students and business people between 18 and 40 years old, and many of them buy entry-level smartphones. The most popular smartphone brand is Samsung, taking up to 23 percent market share. A much closer smartphone brand is Micromax that finds a Chinese mobile phone OEM for manufacturing cheap phones, and always competes with Samsung for the top one in India smartphone market. As a second tier smartphone brand, Intex, which also cooperates with Chinese OEM for manufacturing the phones, has sold up to 11 percent of smartphones until the second quarter of 2015. Followed is Lava, which is the earliest brand to sell cheapest smartphone on the market. As its low price, Lava dominates the low end market and takes up to 7 percent of market share. Lenovo, a well-known Chinese mobile phone brand, takes over 6 percent of the Indian smartphone market share. 

So there must be a big growth in the India smartphone market. First, India’s population ranks in the second position of global, just after China, but the coverage of smartphone is less than 10 percent, most Indian still use functional mobile phones. Second, there are few local smartphone manufacturers in India, do not have the capacity to promote smartphone country-widely. But now, the international smartphone brands start to aim at this virgin market and build factories to manufacturing smartphones. Local brands also collaborate with Chinese phone OEMs and factories to manufacture smartphones.

"As China started to slow down, most vendors from the country have targeted India as the next big growth market for smartphones," IDC Research Manager Asia/Pacific Mobile Phone team Kiranjeet Kaur said. Also, Chinese vendors have tripled their shipments Y-o-Y in India. Lenovo, Xiaomi, Huawei and Gionee alone accounted for 12% of the total smartphone market in the second quarter, a double from year ago.

If India is following China’s step in smartphone development, then it is absolutely the next big growth smartphone country after China’s market matures.

“India has captured a lot of the attention that China previously received and it’s now the market with the most potential upside,” explained IDC Program Director Ryan Reith. “The interesting thing to watch will be the possibility of manufacturing moving from China and Vietnam over to India. We’ve begun to see this move as a means to cut costs and capitalize on financial benefits associated with localized India manufacturing. It is the local vendors like Micromax, Lava, and Intex that will feel the most pressure from international competition within its market.”

smartphone , Chinese OEMs , India , China