According to a report by International Data Corporation  (IDC), India shipped 146 million smartphones in 2023, with a nominal 1 per cent growth year-over-year (YoY). The second half (H2) of 2023 grew by 11 per cent YoY, compensating for the sharp 10 per cent decline in H1 2023. Meanwhile, the fourth quarter (Q4) of 2023 grew by 26 per cent YoY with shipments of 37 million units, as the second half of the quarter saw stronger than expected shipments with several new model launches.

As per the report, consumer demand remained stressed, leading to excess inventory levels across channels despite price corrections and schemes by the vendors. At the same time, the average selling price (ASP) hit a record of $255, rising 14 per cent YoY in 2023. This also marks the third consecutive year of double-digit ASP growth restricting smartphone market recovery. The high ASP can be attributed to the increasing share of the premium-segment (over $600) from 6 per cent in 2022 to 10 per cent in 2023, along with a rapid uptake in 5G shipments to a record 55 per cent share.

Commenting on the report, Upasana Joshi, research manager, client devices, IDC India, said, “Most brands chose to reduce prices and offer additional channel margins in the last quarter to manage the inventory levels from post festive cyclic dip. This will give a lukewarm start to 2024 with cautious stocking by the channels.”

The report noted that the shipments to online channels dropped by 6 per cent and its share dropped to 49 per cent in 2023, down from 53 per cent in 2022. Offline channel shipments grew by 8 per cent YoY as vendors strengthened their retail presence with lucrative premium offerings as well as an expansion into smaller towns and cities.

Key findings of the report:

  • The entry level (sub-$100) segment grew by 12 per cent YoY to 20 per cent share, up from 18 per cent a year ago. While Xiaomi continued to lead, POCO (second position) and Samsung (third position) emerged in the top brand list.
  • Shipments to the mass budget ($100<$200) segment declined, with its share dropping to 44 per cent from 51 per cent, declining by 12 per cent YoY. vivo, Realme and Samsung together accounted for 53 per cent of shipments.
  • The entry-premium ($200<$400) segment remained flat, with 21 per cent share. vivo and OnePlus had significant share, making up almost 40 per cent of overall shipments in this price segment.
  • The mid-premium segment ($400<$600) reached a share of 5 per cent, growing by 27 per cent YoY. OnePlus continued to lead with 35 per cent share, followed by Samsung and vivo.
  • The premium segment ($600<$800) reached 3 per cent share, growing by 23 per cent, led by the iPhone 13, Galaxy S23/S23 FE and OnePlus 11. While Apple’s share declined, Samsung’s share more than doubled in this segment.
  • The super-premium segment ($800+) registered the highest growth of 86 per cent, with its share up from 4 per cent to 7 per cent. The iPhone14/13/14 Plus together accounted for 54 per cent of shipments, followed by the Galaxy S23+/S23/S22+/S23 Ultra with 22 per cent share. Overall, Apple led the segment with a share of 68 per cent, followed by Samsung at 30 per cent.

The report added that about 79 million 5G smartphones were shipped in 2023, with a plethora of launches in the mass budget segment. 5G ASPs dropped to $374, a decline of 5 per cent YoY in 2023. Within 5G shipments, the mass budget ($100<$200) segment share increased to 35 per cent from 22 per cent a year ago, while the entry-premium ($200<$400) segment continued to dominate with 38 per cent share, albeit down from 49 per cent in 2022. Apple’s iPhone 13 and 14, Samsung’s Galaxy A14, vivo’s T2x and Xiaomi’s Redmi12 were the highest shipped 5G models in 2023.

Further, the report noted that almost a million shipments of foldable phones shipped, with ASPs declining by 4 per cent at $1,236. Samsung led the foldable phone market, although its share dropped to 73 per cent in 2023 as other players such as Motorola, Tecno, OnePlus and OPPO have entered India’s foldable market. Meanwhile, the share of MediaTek-based smartphones increased to 50 per cent, growing by 6 per cent YoY. vivo’s T2x, Xiaomi’s Redmi A2, and Realme’s C55 were the highest shipped MediaTek-based models. Additionally, Qualcomm’s share dropped to 25 per cent, representing a shipment decline of 6 per cent YoY.

In terms of brand performance, the report added that Apple had a stellar year, finishing at 9 million units, despite having the highest ASP of $940. This was led by previous generation iPhone models and its push for local manufacturing. Its iPhone 13/14 were amongst the top 5 shipped models annually. In addition, Samsung remained in the leadership position, with a record high ASP of $338, although with a 5 per cent shipment decline YoY. Its Galaxy A14 was the highest shipped device of 2023. Meanwhile, vivo (excluding iQOO) climbed to the second slot as shipments and ASPs both grew by 8 per cent and 9 per cent respectively. It was the only brand to register growth amongst the top five brands. Further, Realme, despite facing challenges in the beginning of the year, maintained its third position, led by affordable launches.

Furthermore, the report noted that after declining for four consecutive years, 61 million feature phones were shipped, growing by 8 per cent YoY. While Samsung exited the feature phone segment, Transsion continued to lead, followed by Lava. The entry of Reliance Jio’s new 4G feature phone fueled growth in H2 2023.

Meanwhile, Navkendar Singh, associate vice president (AVP), client devices research, IDC India, said, “The road to recovery for smartphones in 2024 looks strained and elongated, as worries around income, inflationary stress, price increases, and inventories remain. 2023 was all about affordable 5G devices, timely price corrections, and offline channel expansion by brands, whereas 2024 and beyond requires greater efforts, especially at entry-level price points, to fuel organic growth. IDC estimates a flat to low single digit annual growth in 2024, primarily led by upgraders in ($200<$400) segment, backed by financing schemes, extended warranties and upgrade programs.”