ASPs (average selling price) declined by two per cent YoY at US$156, with 84 per cent of shipments in the sub-US$200 range (29 per cent below US$100), driven by e-learning requirements since smartphones remain the only device for internet access for most households in India
According to the International Data Corporation’s (IDC) Quarterly Mobile Phone Tracker, India was the only smartphone market in the top three to witness growth. Both the China and USA markets declined year-over-year (YoY) in 3Q20 (July-September 2020). A record 54.3 million units were shipped during the quarter with 17 per cent YoY growth in the crucial third quarter of the year.
“IDC expects the low-end and mid-range segment to continue being the volume driver. As consumer sentiment improves in the next few quarters, upgrades and affordable 5G offerings in the US$200-500 segment is expected to drive growth,” says Upasana Joshi, associate research manager, Client Devices, IDC India.
The reopening of the country with fewer restrictions was further fueled by pent-up demand in July and August and channel stocking in September to meet the upcoming Diwali quarter demand.
Key trends
IDC points out that while OEMs launched more low-priced smartphones, they upped the game on specifications with more phones featuring quad-cameras, high megapixel counts (48MP+), more storage (64GB+), bigger batteries (5000mAH+), etc. even as prices declined.
“Though the 5G network will only launch by end-2021, the “devices go first” strategy led to a million units of 5G smartphone shipments in 3Q20. IDC expects a gradual uptake of 5G devices in 2021, expanding into the mid-range segment, as the ASP gap between 4G and 5G offerings narrows,” read IDC’s report.
ASPs (average selling price) declined by two per cent YoY at US$156, with 84 per cent of shipments in the sub-US$200 range (29 per cent below US$100), driven by e-learning requirements since smartphones remain the only device for internet access for most households in India. The mid-range segment (US$200<500) declined YoY, as consumers held back on upgrading to a more expensive smartphone due to economic uncertainties.
The premium segment (US$500+) witnessed a strong growth of 91 per cent YoY; where Apple, Samsung, and OnePlus continued to be the top three players. Apple also launched its online store in 3Q20, offering a wide range of first-time services. A total of 25 million feature phones were shipped in 3Q20, a decline of 30 per cent YoY. As a result, the overall mobile phone market shipment dropped by four per cent YoY, with feature phones accounting for only 31 per cent share.
“This healthy growth in shipments in 3Q20 is expected to continue through October and early November during the festive months. However, the double-digit growth anticipated for H2’20 may not be able to make up for the challenging first half of the year. IDC expects to exit 2020 with a low single-digit YoY decline after several years of annual growth. All indicators are pointing towards the supply constraints fully easing out not before early 2021, along with demand normalizing as economic recovery starts. The mobile phone ecosystem also must address the migration inertia of the huge 2G installed base to smartphones. This is imperative to see organic growth for the market in the next 3 to 5 years,” noted Navkendar Singh, research director, Client Devices & IPDS, IDC India.
