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India the fastest growing smartphone market in Asia-Pacific in Q3; overall shipments touched 23.3M units: IDC

India was the fastest growing smartphone market in Asia-Pacific with a quarter-on-quarter growth of close to 27 per cent in the third quarter of 2014. The country's smartphone shipments in the quarter stood at 23.3 million units, recording a year on year growth of 82 per cent over Q3, 2013.

The market observed exceptional growth owing to festive demand and recorded a new high in smartphone shipments in the quarter, according to a report by International Data Corporation (IDC). In addition, Q3's results revealed a second consecutive quarter of more than 80 per cent YoY shipment growth for smartphones, reflecting robust end-user demand for the category in the country.

Table 1 The overall mobile phone market stood at 72.5 million units in the quarter, which was a 15 per cent QoQ growth and a 9 per cent YoY growth. The share of smartphone market in the overall mobile phone market stood at 32 per cent in the quarter, which was a considerable growth over 19 per cent in the same period a year ago.

"With six per cent contribution in the overall smartphone market, 'phablets' (defined as 5.5-6.99 inches screen size smartphones) are observed to be hitting a plateau. On the other hand, smartphone with screen size between 4.5 inches and 5.5 inches are seen as the sweet spot for consumer preference," said Kiran Kumar, research manager, client devices, IDC India.

"Consumer need higher screen size phones to enjoy media content and with the 4G rollout expected in CY 2015, we expect the phablets segment to pick up again," he added.

Table 2 Top smartphone vendors

Samsung maintained its leadership position with 24 per cent market share in Q3, 2014. While the company witnessed shipment growth in the quarter, it was lower than the industry average. Hence, there was a contraction in its market share.

Micromax came second and the company had yet another strong quarter. Its market share increased from 18 per cent in the previous quarter to 20 per cent in Q3, 2014. Being one of the fastest growing handset vendors, Lava came third with eight per cent market share. The company witnessed growth in both its brands- Lava and XOLO. Note that both the brands are currently treated as independent line of businesses in the marketplace.

Karbonn (tied with Lava for number three) and Motorola completed the top 5 with eight and five per cent market share respectively. More than 85 per cent of Karbonn's shipment volume was supported by handsets priced less than $100 (Rs 6,188).

TABLE 3 Also, despite being available only through online channel (exclusively on Flipkart.com), Motorola maintained its success story in the smartphone market in the country. The company's fresh line up of second generation handset fared well for the vendor.

In the overall mobile phone market, contribution of feature phone in Q3, 2014 compared with the year ago quarter showed a negative growth of nine per cent as large number of users continue to migrate to smartphones. While Samsung, Micromax, and Nokia clinched the top three positions (in that order) in the overall mobile phone market, Lava was able to clinch the fourth spot surpassing Karbonn.

What's in store?

Shipment growth in Q3 was largely a result of festive demand. IDC expects the trade to hold sufficient inventory leading to a lesser intake in Q4, 2014. On the basis of these observations, the short term outlook of the market remains neutral.

"With positive consumer sentiments and low levels of inflation, consumers will have more money to spend. Majority of the smartphone users change their phones within 12 to 24 months. With 44 million units shipped in CY 2013 and the current market scenario hinting at 80 million plus shipment in CY 2014, we have a big chunk of end-user market which is awaiting refresh," said Karan Thakkar, senior market analyst at IDC India.

In addition, new initiatives on the 4G front are expected to be rolled out by the vendors which would spark up demand in the smartphone market in CY 2015.

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