India defies global trends as smartphone shipments grow 20%

IDC has released its quarterly estimates of smartphone shipments for India, claiming 33.5 million units were sold across the period, a year-on-year increase of 20%.

While this is great news for Indian telcos and smartphone manufactures, capitalising on the country’s late charge towards the digital economy, global trends are not as positive. Broader estimates from IDC put global smartphone shipments down 1.8% over the course of the second quarter, though in shipping 95 million devices, the three month period was a positive one for Huawei.

“Huawei has had a stellar quarter worldwide moving into the second position, toppling Apple,” said Upasana Joshi of IDC. “In India, with a refreshed focus it has been able to grow its share in the online space in the last two quarters, on the back of several new launches across price segments. IDC believes Huawei should be seen as a serious long-term player in India market with all the ingredients to challenge Xiaomi and Samsung.”

As the wealthier markets worldwide are no-longer looking as glorious for the smartphone manufacturers, with many hitting a glass ceiling in terms of smartphone penetration to population, India is a very attractive proposition. The young, increasingly affluent, population are ready to be sold to. Largely thanks to the Reliance Jio disruption, the digital revolution is fast taking over the country with data consumption rising healthily quarter-on-quarter. Jio consumers use on average 10.6 GB of data per month, including 15.4 hours of video. The appetite for the digital economy and more premium devices usually go hand-in-hand.

While the majority of devices are still low- to medium-end, shipments of high-end devices (those worth more than $500) doubled year-on-year, with the Samsung Galaxy S9 series and OnePlus 6 being crowned winners. OnePlus surpassed Apple to take second place in the premium market share rankings. That said, consumers are taking advantage of financing schemes in the offline channels to snap up deals, average selling price decreased from $167 to $157 for the quarter, while demand for feature phones continues to be strong, growing 29% year-on-year.

In terms of capitalising on the opportunity right now, Xiaomi took top spot for shipments over the three months, increasing its shipments by 107% year-on-year and capturing 29.7% of total market share. Samsung captured 23.9% of shipments, though with Huawei continuing to make solid progress worldwide it might not be too long before it starts making its mark on the India market.

Smartphone shipments down but Huawei has something to cheer about

Shipments of smartphones across the second quarter of 2018 were down 1.8% year-on-year, though Huawei managed to sell enough devices to leapfrog Apple into second place on the rankings table.

According to estimates from IDC, smartphone vendors shipped a total of 342 million units during the second three months of 2018, a decline of 1.8% year-on-year. This is the third consecutive period of decline, and only the fourth in history.

“The combination of market saturation, increased smartphone penetration rates, and climbing ASPs continue to dampen the growth of the overall market,” said IDC’s Anthony Scarsella. “Consumers remain willing to pay more for premium offerings in numerous markets and they now expect their device to outlast and outperform previous generations of that device which cost considerably less a few years ago.”

It might not be the positive news in the world, but IDC believe it is only a temporary dip. The decline is a result of churn in some highly penetrated markets, though with the number of high-growth markets around the world remaining high, growth should return in the near future.

One company which is not going to complain is Huawei, as estimates show it has eclipsed Apple to take the number two spot in the global market share tables. Huawei moved roughly 54 million devices across the period, claiming a 15.8% market share, though with 20.9%  Samsung is still comfortably in the lead. Samsung’s lead is particularly impressive as the numbers include a 10.4% decline in shipments from the same period last year.

Huawei’s rise can be partially by taking advantage of lacking innovation in the field. With consumers struggling to justify the huge sums for new devices which offer little in terms of new features, the slightly more cost-effective Huawei devices can look attractive. Another explanation would be continued leadership in the Chinese market.

According to Counterpoint Research, although overall sales in the Chinese market declined by 7% compared to the same period of 2017, though Huawei maintained its position as the market leader, growing market share from 20% to 26%. Huawei increased sales by 22% year-on-year.

Shipment declines can partly be blamed on a lack of innovation. Without new features, marketers will struggle to convince consumers to part with hard-earned cash, though with 5G compatible devices set to hit the shelves in 2019, there certainly will be something new to shout about.