Smartphone shipments in India fell to around 31 million units in the January-March quarter, marking the biggest drop of 19% in the first quarter on a yearly basis, the market research firm said on Thursday. Counterpoint.
Mobile phones priced below Rs 30,000 each saw a sharp decline while shipments in the premium and ultra premium category saw an increase of 60-66%.
“This is the largest Q1 decline ever in the Indian smartphone market, in addition to the third consecutive quarterly decline. Sluggish demand, heavy inventory accumulation carried over from 2022, growing consumer preference for refurbished phones and a pessimistic view of the market across channels contributed to this decline,” the market watch service’s report said. from Counterpoint.
The contribution of 5G smartphones to total smartphone shipments reached a record 43%.
“With a 20% market share, Samsung dominated the Indian smartphone market for the second consecutive quarter. It was also the top 5G brand,” the report said.
Samsung’s new 5G-enabled A-series performed well in the offline market, contributing 50% of shipments.
Samsung’s ultra-premium segment (priced above Rs 45,000) grew 247% year-on-year in the March 2023 quarter, driven by the successful launch of the S23 series and finance options, according to the report.
Apple grew 50% year-over-year and gained a 6% share in the March 2023 quarter.
Apple maintained its lead in the overall premium segment (Rs 30,000) as well as in the ultra-premium segment (above Rs 45,000) with 36% and 62% of the shares respectively.
The iPhone maker’s shipment was fueled by its new funding program with HDB Financial Services and promotions on the latest iPhone 14 series in offline channels.
“The premiumization trend is getting stronger with each passing quarter. The share of the premium segment nearly doubled in the first quarter of 2023 compared to the first quarter of 2022,” said Prachir Singh, senior research analyst at Counterpoint.
Singh said affordability is key here as more financial schemes have been launched, such as Apple’s Toll-Free IME with “zero down payment” offers on the last premium segment, increased trade-in offers and push from retailers.
“Growth in the high-end segment is reducing mid-range share as consumers shift to more expensive smartphones,” Singh said.
The price of mobile phones in the range of Rs 20,000-30,000 saw a drop of 33% in shipments, the Rs 10,000-20,000 segment saw a drop of 34% and phones priced below Rs 10,000 saw a 9% drop in shipments on an annual basis.
“We are seeing a change in consumer behavior, demand is now concentrated around promotional periods. The start of the quarter saw an increase in demand across all channels around the Republic Day sales period. However, demand dropped significantly after the sales period. Chain players are now focusing on deleting existing inventory instead of creating new inventory of new models,” said Shilpi Jain, senior research analyst at Counterpoint.
She said the quarter’s silver lining came from 5G smartphones, whose contribution (43%) topped 40% for the first time, recording 23% year-on-year growth as consumers continued to switch to 5G devices.
“We believe these situations will also remain similar in the second quarter of 2023, with growth returning to the second half thanks to faster 5G upgrades, the easing of macroeconomic pressure and the holiday season,” said Jain.
Vivo also maintained its second position during the quarter with a 17% market share despite a 3% year-on-year decline in shipments.
Xiaomi saw a 44% year-on-year decline from the first quarter of 2022, falling to third place in the baseline quarter with a 16% share.
“The decline was due to weak demand in the sub-Rs 10,000 segment, greater reliance on online channels even when demand is higher in offline channels and a confusing portfolio. The Redmi Note 12 series has received a positive response from consumers, contributing more than 14% of Xiaomi’s total shipments,” the report said.
OnePlus was the fastest growing brand with 72% year-over-year growth in the March 2023 quarter.
“Among local brands, Lava has done well with its refreshed portfolio in the sub-Rs 10,000 segment. Lava continues to offer the cheapest 5G smartphone (Blaze 5G). It was also the third fastest growing brand in the first quarter of 2023 growing 29% year-on-year,” the report said.
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