According to latest research by Counterpoint, India’s smartphone shipments grew 9 per cent year-on-year (Y-o-Y) but fell 5 per cent quarter-on-quarter (Q-o-Q) to reach almost 37 million units in second quarter (Q2) ending 30 June, 2022. Citing the reasons, the research report asserts that the Y-o-Y growth was primarily driven by a lower base in Q2 2021 due to the second COVID-19 wave. The Q-o-Q drop was due to macroeconomic headwinds affecting consumer demand.
Commenting on the market dynamics, Prachir Singh, senior research analyst, Counterpoint, said, “We saw the consumer demand declining Q-o-Q during the quarter, especially in May and June. Consumers are preferring to repair their device or buy a refurbished one than make a new purchase. This trend is more visible in the entry and budget segments. Due to this decline in demand, almost all the brands are facing inventory issues. At the end of June, India’s smartphone market was sitting on more than 10 weeks of inventory, more than double the normal inventory size. Brands were seen aggressively promoting offers to clear this inventory and prepare for the festive season.”
Meanwhile, commenting on the competitive landscape and brand strategies, Shilpi Jain, Research Analyst, Counterpoint, said, “India’s smartphone user base crossed the 600-million mark during this quarter. Also, the 5G smartphone penetration continued to increase. The 5G smartphone shipment share reached 29 per cent of overall shipments in Q2 2022, which was the highest ever. The 5G auction and commercial availability will accelerate 5G smartphone adoption among users. The smartphone retail ASP (average selling price) is also witnessing a growth trend. It grew 10 per cent Y-o-Y in Q2 2022 driven by an increasing share of the higher price segments. The >Rs 20,000 price band’s share reached the highest ever in Q2 2022, crossing the 22 per cent mark. The growth in upper and premium segments is primarily due to the availability of financing schemes aimed at increasing device affordability.”
Further, the study noted that India’s mobile handset market grew 6 per cent Y-o-Y but fell 9 per cent Q-o-Q in Q2 2022. The feature phone market registered a decline of 17 per cent Q-o-Q primarily due to the decline in consumer demand. itel led India’s feature phone market in Q2 2022 with a 25 per cent share. itel has been the top feature phone brand for 10 consecutive quarters.
