Indian smartphone shipments grew by 11% in Q1 2018; Xiaomi still leads

The 4G feature phone market continued to grow at more than 50 percent quarter-on-quarter, driven primarily by Jio Phone.

By Priyanka Dua

    The Indian smartphone market saw a shipment of 30.0 million units in the first quarter of 2018, making it the strongest start to a year and maintaining a healthy year on year growth of 11 percent, International Data Corporation (IDC) said on Monday.

    Indian smartphone shipments grew by 11% in Q1 2018; Xiaomi still leads

    According to the IDC, Xiaomi maintained its lead in the market for the second quarter in a row with further expansion in the offline channel and popularity of its models such as Redmi 5A and Redmi Note 5.

    "Xiaomi is in a unique position with a diversified channel approach and strong demand in each of the channels. Huawei's Honor 9 Lite also made into the top 5 online models in its debut quarter 2018Q1," says Jaipal Singh, Senior Market Analyst, IDC India.

    Various other companies, on the other hand, used the online channel to expand their share in the market, notable amongst those being Honor, iVOOMi, and Tenor (10.or). This led to share growth of the online channel within smartphone market from to 34.2 percent in 2017Q4 to 36.0 percent in 2018Q1, IDC said.

    Xiaomi increased its share of total eTailer shipments from 32 percent a year ago to 53 percent in 2018Q1, IDC added.

    It said South Korean tech giant Samsung remained at the 2nd spot in smartphone ranking with flat annual growth in 2018Q1, OPPO climbed to the 3rd position from 5th in the last quarter, while Vivo slipped to 4th position as its shipments declined by 29.4 percent year-over-year in 2018Q1.

    However, the brand grew by 2.1 percent as compared to previous quarter. The Y series of Vivo continued to generate close to 70 percent demand.

    Furthermore, Transsion made its debut in the Top 5 with more than threefold annual growth in shipments in 2018Q1. The China-based group has four brands under its umbrella - namely itel, Tecno, Infinix, and Spice.

    The 4G feature phone market continued to grow at more than 50 percent quarter-on-quarter, driven primarily by Jio Phone. The operator disrupted the market by introducing aggressively priced data plans at Rs. 49 in the initial weeks of the quarter acting as the catalyst for growth.

    The report pointed out that the ultra-high-end segment ($600+) saw a strong YoY growth of 68 percent largely due to strong shipments of Samsung's Galaxy S9 series which arrived a quarter earlier this year, and led with a 77 percent share in this segment. OnePlus, owing to its popular models 5 and 5T, continued to keep more than 50 percent share in the high-end segment ($400-US$600)

    Upasana Joshi, Senior Market Analyst, IDC India, "The recent import duty hike on PCBs, camera modules and connectors by the Indian government, definitely puts cost pressure on the smartphone companies, till such time that they set up lines for CKD (Complete Knock Down) type of manufacturing to reduce this impact. This will increase the challenges for smaller companies even more."

    Joshi adds further, "As companies continue to reel under margin pressure due to rising custom duty and raw material prices, retailers and distributors in the offline channel fear a cut in their commissions to absorb the impact of price hikes."

    As per IDC's forecast, the government push for high-end electronics local manufacturing and accompanying duty hike puts most of the mobile phone vendors under further margin pressure. However, a vendor looking to establish itself for the long term will have to show commitment by setting up the SMT units here.

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    IDC expects the smartphone market to continue its double-digit growth in 2018 with the popularity and focus on budget phones, efforts by ecosystem to make devices more affordable with finance schemes.

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