Indian smartphone market contracted for the first time in its history: Canalys

According to the new report by Singapore-based market research firm Canalys, the Indian smartphone market contracted for the first time in its history, as shipments to the country fell 4 percent year on year to just under 27 million units in Q2 2017.

However, Samsung continues to lead the market, with a 25 percent share, followed by Xiaomi, which more than quadrupled its shipments to 4.8 million units this quarter.

The report said, Vivo took third place, shipping an all-time high of 3.4 million units, owing to its rising popularity among tier-two and tier-three cities and Oppo displaced Lenovo to take fourth place, while Lenovo finished fifth with 1.9 million smartphones.

With China suffering its own decline this quarter, India is a market of huge strategic importance to Chinese smartphone vendors," said Canalys Research Analyst Ishan Dutt.

He said, "Samsung is under immense pressure in the mid-tier from the Chinese players. For now, its low-end J Series is helping it sustain its lead and maintain share. But it needs to use its brand to make its mid-tier devices more desirable.

The recently launched S8 and S8+ have helped it win back some of its premium shares. It now needs to generate a halo affect around these products in the mid-tier to counteract the threat from China."

Collectively, Xiaomi, Oppo, Vivo, Gionee and Lenovo control over 50 percent of India's smartphone market, the research firm added.

The Goods and Services Tax (GST), applicable in India from 1 July 2017 across all products and services, has adversely affected the market this quarter.

"There is general confusion in the entire market over GST and a lack of awareness about the changes that are needed. Apprehension among distributors and retailers regarding the impact on prices has caused the market to adopt a wait-and-see policy," said Canalys Analyst Rushabh Doshi.

Doshi said, "The market will emerge stronger post-GST. Vendors can look forward to leaner distribution, faster delivery and increased demand from local retailers and distributors."