As per projections, India’s smartphone market to grow 10% to reach 175 units – Counterpoint Research
Mumbai: India’s smartphone market will continue to remain under pressure, impacting its growth prospects in the next year. The Indian smartphone market is expected to see modest growth in 2023, according to Counterpoint Research.
India’s smartphone shipments are expected to fall 5% YoY in 2022, as per Counterpoint Research’s projections. “The inflationary macro environment, component and chip shortages and rise in their prices, and wild cards like the Russia-Ukraine war and weakness in the overall global economy affected the smartphone market globally, including in India,” the report revealed.
The smartphone market in India during the past five years except for the COVID-19 hit year 2020 saw a steady rise with 1.5 times growth from 2016 to 2021. The market is expected to grow by 10% in 2023 to reach 175 million units, as per Counterpoint Research report.
What happened in 2022?
The market failed to meet expectations in 2022. The year kicked off amid component shortages, but the supply situation was resolved by mid-year. And yet, the consumer demand did not improve as expected.
Particularly, the entry and mid-level price bands experienced weak demand owing to the increase in retail prices due to the rise in component prices and the inflationary macro environment.
The premium market continued to grow in 2022 with the INR 30,000 ($400) price band reaching a new high. The continued premiumisation of the market is the main reason why it saw positive revenue growth with the highest-ever average selling price (ASP) of close to INR 20,000 ($250).
Why will the market rebound in 2023?
High installed base: With over 600 million smartphone users in India today, this number is expected to grow over time as more feature phone users migrate to smartphones. The replacement demand from these users will drive the market in 2023 and beyond.
5G push: 5G networks are now live in multiple cities. Even though 5G smartphones have been making news in the market, they will account for just one-third of the market in 2022. 5G has been high on Indian consumers’ wish lists and with 5G networks now being available, many consumers will replace their 4G smartphones in 2023.
Government purchase of smartphones to push sales: The state of Rajasthan has rolled out a tender for the acquisition and distribution of smartphones among women in 2023.
Improvement in the macro environment: We also expect the inflationary macro environment to get better next year. Therefore, consumers who postponed buying a new phone in 2022 will be able to buy a new one in 2023.
Long-term outlook remains positive
Despite the dip in 2022, India’s smartphone market has been resilient and performed better than many other regions. A large installed base, feature phone-to-smartphone migration, local smartphone production, development of supply chain and the emergence of newer use cases will continue to grow the market in the longer term.