According to a report by International Data Corporation (IDC), India’s smartphone market remained flat year-on-year (YoY), shipping 44 million units in Q3 2023. July and August 2023 registered single-digit growth as the channels started early festive stocking, but September 2023 had its lowest shipments since 2019, as tapered demand and high prices restricted growth. This came on the heels of a challenging first half of the year and a modest start to the festive season.
As per the report, the average selling price (ASP) hit a high of $253, with 5 per cent quarter-on-quarter (QoQ) and 12 per cent YoY growth in Q323. Vendors focused on affordable 5G devices and discounts across the channels. 5G smartphone shipments reached a record 58 per cent share with 25 million units in Q323. 5G ASP dropped to $357 during the report quarter, a decline of 9 per cent YoY. The majority of 5G smartphone launches were in the mass budget ($100-$200) price segment, increasing the 5G share in this segment to 52 per cent from 34 per cent a quarter ago. Samsung’s Galaxy A14, Apple’s iPhone 13, and Xiaomi’s Redmi 12 were the highest shipped 5G models in Q323.
The report finds that entry-level (sub-$100) segment grew by 16 per cent YoY, with a 20 per cent share. The mass budget ($100-$200) segment underperformed, its share dropping to 44 per cent from 51 per cent, declining by 14 per cent YoY. Entry-premium (US200-$400) segment grew by 2 per cent YoY, with a 22 per cent share. Mid-premium segment ($400-$600) with a share of 5 per cent, grew by 37 per cent YoY. The premium segment ($600-$800), at 3 per cent share, registered the highest growth of 52 per cent, led by iPhone 13, Galaxy S23/S23 FE and the newly launched Moto Razr 40. Super-premium segment ($800+) similarly registered a healthy 43 per cent growth, with its share up from 4 per cent to 6 per cent in Q323. Apple led this segment, with a 60 per cent share, with high shipments of its iPhone13/14/14 Plus. Samsung too gained share, from 24 per cent to 36 per cent in Q323, coming from the newly launched Galaxy Z Fold5/Flip5 and Galaxy S23+/S23 Ultra. Foldable phone shipments hit a record half million units in a single quarter, Samsung leading with 66 per cent share. New launches by Motorola at lower price points brought the ASP of foldable phones down to $1,198 from $1,319 a year ago.
As per the report, shipments to offline channels continued to be higher than online channels, with strong double-digit growth in 3Q23. However, multiple rounds of eTailer events with special platform pricing and online exclusive deals are expected to drive online demand in the coming weeks. As a brand, Samsung surpassed vivo for the leadership position, although its shipments declined YoY. Samsung had the highest ASP amongst the top five brands at $381, growing by 43 per cent YoY. realme climbed to the second slot, driven by the newly launched C53 and 11x. vivo (excluding iQOO), registered the highest growth amongst the top five brands, driven by affordable Y and T series models. OnePlus, with 35 per cent of shipments driven by Nord CE3 Lite, and Poco, also had growth of over 50 per cent YoY.
Commenting on the findings, Upasana Joshi, research manager, client devices, IDC India, said, “A swift uptake in affordable 5G smartphone shipments signals bullish sentiments and success of affordability efforts of the vendors. We should expect the previous generation of premium smartphone models to be in high demand this festive season, made affordable by various offers and upfront discounts across channels.”
Meanwhile, Navkendar Singh, associate vice president, devices research, IDC, said, “A range of micro-financing options available on budget devices like no cost EMI offers for longer periods (from 24 to 30 months) and affordability initiatives by all major brands has given a modest start to the festive season. However, as demand softens in the latter half of the quarter (post-Diwali), brands may face excess inventory challenges. Hence, the outlook for 2023 remains flat or a low single-digit decline. Next year we will see a range of affordable 5G and foldable phones at the mid to premium end, but the inflationary stress and longer refresh cycles will likely limit the annual market growth in 2024.”
