Indian smartphone market records 1.7% YoY decline after several years

After several years of growth, the Indian smartphone market exited 2020 at 150 million units, a 1.7 percent YoY (year-over-year) decline. According to international research firm IDC, stay-at-home mandates, remote work, remote education, travel restrictions, and manufacturing shutdowns led to a sluggish H1’20 (-26 percent YoY decline), particularly impacting 2Q20.

However, H2’20 recovered with 19 percent YoY growth as markets reopened gradually. Lockdowns and restrictions rendered an urgent need for devices supporting activities such as entertainment, work from home, and remote learning, resulting in more devices per household, and leading to a resurgence in demand for consumer devices including smartphones, consumer notebooks, and tablets in 2020.

4Q20 (October-December) posted record fourth-quarter smartphone shipments of 45 million devices, with 21 percent YoY growth. While smartphone shipments for the full year 2020 remained below the pre-pandemic level, IDC believes a stronger market acceleration in 2021 will be led by upgraders.

Navkendar Singh, research director, Client Devices & IPDS, IDC India mentions: “The rebound of the smartphone market in the latter half of 2020 underscores the importance of devices in our day-to-day lives. In 2021, IDC expects the smartphone market to grow in high single-digit YoY, driven majorly by upgrading consumers, in the mid-range segment and affordable 5G offerings (~US$250). Also, revamped offline channel play is anticipated, to bring back growth in the very important brick and mortar counters for long term sustainability.”

IDC

The key market trends for 2020 are listed as below:

  • The online channel outpaced the overall market, growing by 12 percent annually with a 48 percent market share in 2020. Multiple sales events, promotions, trade-in/upgrade programs, and affordability initiatives helped it in clocking a record 51 percent share in 4Q20. However, in the pre-Diwali weeks of October and November, retail footfall gradually picked up the pace, as the offline channel registered 5 percent YoY growth in 4Q20.
  • MediaTek processor-based smartphone shipments led with a share of 43 percent, closely followed by Qualcomm at 40 percent in 2020. MediaTek expanded its lead in the <US$200 price segments.
  • 5G smartphone shipments crossed 3 million in 2020, with Chinese OEMs rolling out aggressively-priced devices through 2020, including Xiaomi’s Mi 10i at a <US$250 price point. But adoption was limited by higher prices and the lack of a 5G network, which is expected to start to roll out in late 2021 or early 2022.

“As more 5G devices enter in 2021, the ASP for smartphones is expected to rise. IDC expects vendors to launch 5G devices at multiple price points backed by aggressive promotions, as 5G currently remains a novelty rather than a necessity to most,” says Upasana Joshi, associate research manager, Client Devices, IDC India.

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