Smartphones overtake feature phones

The third quarter of 2016 saw 32.3 million smartphones being sold in India. While the fourth quarter results are yet to come (but it will be less due to demonetisation), the third quarter is what hints at the future.

At the start of 2016, feature phones still accounted for about 65 percent market share in India. However, throughout the year, smartphones consistently outpaced feature phone sales. According to IDC, smartphone market share was more than feature phones last year. And according to Cisco, India could become the second largest smartphone market in the world by the end of 2016 (the report is not out yet). In the next three years, India will have 631 million smartphones, according to estimates.

The research firm IDC has said that the shipping of smartphones in India increased by 11% in the period of July-September when compared to the previous year. This increase in the shipment of the smartphones is seen due to the distributors gearing up for festive seasons and online sales. This is the first time that the smartphone shipment crossed the mark of 30 million in one quarter.

The quarterly mobile phone tracker of IDC has reported that in the third quarter of 2015, 29.1 million smartphones were shipped to India. In the third quarter of 2016, there was a growth in the shipment by 18.1%, i.e. 27.5 million units of smartphones.

A continuous investment from China-based vendors on retail expansion and high-decibel marketing has led to disruption in the plans of home-grown vendors to some extent, says IDC. “To remain relevant, home-grown vendors are counting on the feature phone market even though they are facing certain supply issues for a few components.”

Since the shift from feature phone to smartphones has slowed down, the Indian vendors are able to maintain their control in the overall mobile market.

IDC added that it has witnessed the development of new brands even though the feature phone market is built up with a few key vendors.

Interestingly, in October 2016, 4G smartphones overtook 3G smartphones. The battle has only just begun.