India-Smartphone sales to jump 29.5% this year amid falling prices

MUMBAI (NewsRise) -- Smartphone sales in India are expected to grow 29.5% this year, research firm Gartner says, aided by falling prices and faster roll-out of high-speed Internet services, contrasting the slowing demand for such gadgets across the world.

Gartner predicts 139 million smartphones will be sold in India in 2016, the research firm said in a statement on Thursday.

The world's second-most populous country has more than a billion mobile phone users, though only less than a fifth of them use smartphones, leaving enough room for a boom in the sales. The strong pace of adoption in India comes at a time when telecom operators such as Bharti Airtel and Vodafone are rolling out high-speed Internet services, betting on rising disposable incomes, a young population and falling smartphone prices.

According to research firm Strategy Analytics, India will overtake the U.S. to become world's largest smartphone market after China by next year.

"India has the highest growth potential," said Anshul Gupta, research director at Gartner. Sales of feature phones totaled 167 million units in 2015, accounting for 61% of total mobile phone sales in the south Asian nation, he said.

Gartner estimates worldwide sales of smartphones to grow 7% this year to 1.5 billion units, down from the 14.4% expansion last year. It expects sales to touch 1.9 billion units by 2020.

"The smartphone market will no longer grow at the levels it has reached over the last seven years," Gupta said, adding that sales recorded their highest growth of 73% in 2010.

Average selling prices of mobile phones in India remain under $70, and devices under $120 will continue to contribute around 50% of overall smartphone sales this year, Gartner said.

Billionaire Mukesh Ambani's Reliance Industries-backed Reliance Jio is set roll out fourth-generation mobile internet services across the country later this year. Analysts expect Jio's launch to shake up the sector, leading to a cutthroat price war that could spur further momentum in smartphone adoption.

The surge in demand for smartphones could help mobile phone operators boost demand for data services, which has slowed in recent months. In the quarter ended in March, Bharti Airtel reported a 9.6% sequential growth in data volumes, its slowest pace ever, while Vodafone's India unit saw its data volumes, or the amount of data consumed by subscribers, remaining little changed.

The strong growth in India contrasts the saturating demand in North America, Western Europe, Japan and Asia Pacific markets where smartphone penetration has reached 90%. The users in these regions are not replacing or upgrading their smartphone as often as in previous years, Gartner said.

"In the mature markets, premium phone users are extending life cycles to 2.5 years, which is not going to change drastically over the next five years," Gupta said.

Source: India-Smartphone sales to jump 29.5% this year amid falling prices