Smartphone makers dial up growth in India

Smartphone makers dial up growth in India

NEW DELHI - Smartphone-makers are in a race to the bottom of India's economic pyramid as they battle for customers in the fast-growing low-end market segment where analysts say opportunities are vast.

India is now the quickest-expanding smartphone market globally and the third-largest market after China and the United States, according to Britain-based consultancy Canalys.

India "is a market that offers huge potential as hundreds of millions of users have yet to upgrade", said Jessica Kwee, an analyst at Canalys.

Sales in the country of 1.25 billion people rose by 84 per cent in the quarter to June from a year earlier as users traded up from basic handsets to more sophisticated models, spurred by ever lower prices.

Local and foreign companies alike are sacrificing profit margins to build market share in India, which counts 914 million mobile users, according to government data.

The cheapest smartphones now retail at 2,000 rupees (S$40), down from an average 15,000 rupees two years ago.

Technology consultancy IDC India projects annual smartphone sales growth of around 40 per cent for the next five years in the price-sensitive nation, home to 33 per cent of the world's poor.

"A new entry-level price point is being breached by Indian home-grown vendors in every (financial) quarter," IDC analyst Karan Thakkar said.

Smartphones now hold a 10 per cent market share among India's mobile-phone-using population, according to IDC.

That 10 per cent figure is widely seen as a "tipping point" - the moment when buyers start opting for smartphones over other phones, going by experiences in other countries.

And the below-US$200 (S$250) slice of the smartphone market is at the heart of the action, accounting for some four-fifths of total Indian smartphone sales, IDC says.

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