The rural sector will propell the growth at a CAGR of 6 per cent, compared with the urban sector growing at a CAGR of 2.5 per cent from 2021 to 2026
India will have 1 billion smartphone users by 2026 with rural areas driving the sale of internet-enabled phones, as per a recent Deloitte study.
India had 1.2 billion mobile subscribers in 2021, of which about 750 million are smartphone users. It is poised to be the second-largest smartphone manufacturer in the next five years.
The rural sector will propell the growth at a CAGR of 6 per cent, compared with the urban sector growing at a CAGR of 2.5 per cent from 2021 to 2026.
Internet-enabled devices in the rural market will also get a push with the government’s plan to fiberize all villages by 2025 under the BharatNet programme.
Deloitte said 95 per cent replacements in the urban market in 2026 will be toward new smartphones, while only 5 per cent will be toward pre-owned phones compared with 75 per cent and 25 per cent, respectively, in 2021.
According to Deloitte’s analysis, demand for smartphones in India is expected to increase at a CAGR of 6 per cent, to reach about 400 million smartphones in 2026 from 300 million in 2021.
This high demand is likely to be primarily created after the launch of 5G, which will alone contribute 80 per cent of the devices (about 310 million units) by 2026. After the launch of 5G, additional shipments of smartphones are expected to be 135 million (cumulative) by 2026.
From 2022, 5G uptake will see year-on-year growth, leading to an increase in 5G smartphone sales in India. It will phase out the 3G mobile network given the evolution of the digital ecosystem and the industry’s efforts to launch affordable 5G handsets.
“As the ecosystem matures in the medium to long term, we expect India to emerge as a strong regional hub in semiconductor and electronics manufacturing,” said P N Sudarshan, Partner and TMT Industry Leader, Deloitte India.
“The government’s recent announcement on the Production Linked Incentive (PLI) scheme for the semiconductor and electronics manufacturing industries has the potential to create an end-to-end ecosystem for manufacturing electronic products. We expect the broader shift to digital to continue in 2022 and drive the industry growth in the future.”
