According to Frost & Sullivan, decline in device prices is driving the increasing adoption of smartphones and tablets amongst users in South Asia. In addition, growing popularity of mobile internet services is also contributing to the growth of smartphones and tablet market in several countries across South Asia.
The research firm forecasts that market revenue for the smartphone and tablet market in South Asia is expected to increase from $4.45 billion in 2012 to $33.33 billion in 2019. Smartphone sales will account for about 70 per cent of the total revenue whereas tablet sales will account for 30 per cent of the revenue. India will lead the growth in the smartphone and tablet market in South Asia followed by Sri Lanka and Bangladesh. Going forward, developing robust, localised distribution channels, especially in semi-urban and rural regions will be important to sustain market growth in these countries.
With the advent of user-friendly, open-source Android-based devices and the declining costs of components such as displays, chipsets and memory chips, the demand for smartphones and tablets in the developing countries will continue to increase. In addition, intense competition amongst vendors has also resulted in lower price points for smartphones and tablets. However, despite falling prices, the total cost of ownership of these devices continues to remain high. In a number of countries, high import duties on mobile devices have escalated prices of the handsets. For example, the Government of Bangladesh levies 12.5 per cent import duty on mobile handsets and the Indian Government imposes an import duty of 6 per cent on mobile devices priced above $40.
According to Frost&Sullivan, the widespread proliferation of grey channel sales could adversely impact the growth of smartphone and tablet market. This phenomenon affects the profitability of authorised vendors. In countries like Sri Lanka and Bangladesh, grey channels make up for as much as 50 per cent of the overall sale volumes. The lack of a robust distribution system and after-sales support in the semi-urban and rural regions are few of the other challenges affecting the industry. In a country like India which supports geographical and linguistic diversity, it is important for the companies to have a strong, localised distribution channel to serve varied end-user needs.
Going forward, the availability of innovative mobile applications along with a strong mobile broadband ecosystem is essential for the growth of smartphones and tablet market. Further, vendors need to constantly invest in technology innovation as well as provide effective pricing models to drive growth in the market.
