India Gives China a Tough Competition in the Smartphone Market

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Every month mobile companies launch a new model with competing features.  Factors like low smartphone penetration and increase in LTE availability have led to the growth of smartphone shipments in India. This also means that it is the best time for vendors to survive in the extremely competitive market like India.

According to a report by Canalys, India has left behind U.S. to become second largest smartphone market. The findings revealed that India has now overtaken the United States to become the world's second-largest smartphone market after China. 

Entrepreneur India takes a look at some other key highlights of the report:

Sales Top 40 million units for First Time: After a wobble in Q2 2017, India's smartphone market recovered quickly, with shipments growing 23% year over year in Q3 2017 to reach just over 40 million units. Samsung and Xiaomi, which shipped 9.4 million and 9.2 million units respectively, accounted for almost half of the total market as the top five vendors continued to post strong growth in Q3 2017.

A Major Relief to Smartphone Industry: "This growth comes as a relief to the smartphone industry. Doubts about India's market potential are clearly dispelled by this result," said Canalys Research Analyst Ishan Dutt.

Low Smartphone Penetration and the Explosion of LTE are the Main Drivers:"There are close to 100 mobile device brands sold in India, with more vendors arriving every quarter. In addition, India has one of the most complex channel landscapes, but with low barriers to entry. Growth will continue. Low smartphone penetration and the explosion of LTE are the main drivers."

Samsung Leads the Race: Despite posting excellent results, the market continues to concentrate, with the top five vendors (Samsung, Xiaomi, Vivo, Oppo and Lenovo) now accounting for 75% of total shipments in India. Samsung shipped 9.4 million smartphones, almost 30% more than in Q3 last year. Second-placed Xiaomi increased shipments by over 290% to 9.2 million units. 

Xiaomi Likely to Overtake Samsung: "Xiaomi's growth is a clear example of how a successful online brand can effectively enter the offline market while maintaining low overheads," said Canalys Analyst Rushabh Doshi. "But Xiaomi focuses on the low end. It struggles in the mid-range (devices priced between INR15,000 and INR20,000 [US$230 and US$310]), where Samsung, Oppo and Vivo are particularly strong. Nevertheless, the study predicts Xiaomi's continued go-to-market innovations will allow it to overtake Samsung within a couple of quarters."

iPhone Sales More Than Double: Apple began local production in India earlier this year, and its iPhone shipments more than doubled to 900,000 units in Q3 2017 compared with Q3 2016, impressive growth in a market that is skewed toward low-end smartphones.

Source: India Gives China a Tough Competition in the Smartphone Market