India‘s smartphone market is set to hit a record high of 173 million units in 2021, growing at 14 per cent year-on-year, according to Counterpoint Research. More than 100 million smartphones are expected to be shipped in the second half of the year, it said.
The market has been experiencing strong consumer demand after the lifting of COVID-19 restrictions in June, and the strong sales momentum will continue during the festive season from August to November, it added.
India’s smartphone market is the second biggest market in the world after China. In 2020, the Indian market outperformed the North America, Latin America and Africa markets.
“Our outlook for India for the next five years remains positive, keeping in mind its 1.39-billion (and growing) population, upgrade of users from feature phone to smartphone, and future emergence of new use cases. The market is set to cross the 200-million mark in the next couple of years,” Counterpoint said.
The research firm noted that the market has been experiencing a steady growth curve over the last five years to reach 158 million units in 2019.
COVID-19 saw shipment experiencing a minor dip of 4 per cent in 2020 to 152 million units (from 158 million units in 2019), showcasing its resilience as well as the emergence of smartphones in a more important role to cater to the pandemic-triggered need for digital communication and newer use cases.
“Even as the second COVID-19 wave hit the country in Q2 2021, the smartphone market bounced back faster than expected and registered its highest ever shipments in H1 2021,” it said.
The research firm said as the number of COVID-19 cases remains under control and the vaccination programme continues, the economy will bounce back and raise consumer confidence.
“The pent-up demand will also play a role, although its impact will be limited compared to last year as COVID-19 lockdowns were shorter this time around.
“The biggest factor pushing the market could be the launch of Reliance Jio‘s low-cost Android phone JioPhone Next in September, which will enable migration of feature phone users to smartphones,” it said.
Counterpoint said the JioPhone Next phone is expected to be priced below USD 75 – a price point that hasn’t seen major activity in the last two years.
“If it works as expected, we might see the Indian market entering a period of hyper-growth…The country has a considerable installed base of 320 million feature phone users. Getting these feature phone users is the key to realising the full potential of India’s smartphone opportunity,” it added.
On the 5G segment, Counterpoint said 5G smartphones accounted for less than 3 per cent of the market in 2020.
In 2021, the market for 5G devices will grow over eight times to reach 32 million units and make up 19 per cent of the overall smartphone market.
Intense competition among OEMs, availability of cheaper 5G chipsets and declining prices of 5G devices will lead to more 5G devices being pushed into the market, it said adding that the average price of entry-level 5G devices has come down by 40 per cent in the last 12 months. The cheapest phone with 5G now costs less than Rs 15,000 (around USD 200).