Heatwave, elections, slump in demand — all these factors have contributed in a relative decline in the Indian smartphone market in the last quarter. However, analysts seem slightly optimistic about the recovery as the festive season looms. “The festive season in India has always been the lynchpin for the smartphone market growth, driven traditionally by a surge in consumer spending, says Prabhu Ram, vice president, Industry Research Group (IRG), CyberMedia Research (CMR).
According to a report by Canalys in Q2 2024, a total of 36.4 million units of smartphone was shipped. The market grew by just 1%. A report by Counterpoint suggests that the market had, in fact, declined by 2% in Q2 2024.
However, as the festive season approaches, there’s some optimism in the market. Sanyam Chaurasia, senior analyst, Canalys, anticipates mid-single digit growth in both the upcoming festive season, as well as overall shipments in 2024.
“At CyberMedia Research (CMR), our estimates point to a double digit growth in smartphone shipments during the quarter,” Ram told Moneycontrol, before adding, that the festive season is expected to play a crucial role in boosting smartphone sales and contributing significantly to market revitalisation.
Furthermore, this festive season is more critical for the market as in the past few years, shipments in the September quarter have generally declined.
The 5G effect to continue
A recent Canalys consumer study revealed that 44% of the consumers expect to purchase a device within the next 12 months, with a significant majority being ‘upgrade buyers’ focused on the latest innovations, including 5G advancements. Ram, on the other hand, believes, premiumisation continues to be a key defining trend, with consumers willing to bet on better specced phones, enabled by attractive trade-in values and financing options.
“As 5G networks expand, our research at CyberMedia Research (CMR) point to more consumers betting on upgrading to 5G-capable phones for future proofing themselves,” he said. On the other hand, Ram does not see consumer appetite being driven by AI, but merely as a novelty feature. “In the long term, brands should prioritise enhancing device experiences through GenAI features, ecosystem integration and innovative form factors to capture these consumers’ interests,” says Chaurasia of Canalys.
More deals and discounts, new launches
Festive season means that both online and offline retailers are expected to usher in a slew of discounts on smartphones. Both value-for-money(Rs 7,000 – Rs 25,000) and premium smartphone segment Rs 25,000) are expected to see majority of discounts. It is this segment that could drive growth in the smartphone market, according to Ram. “There are many attractive smartphone offerings in this segment vying for consumer attention. Alongside the premium smartphones will continue to see a spike.”
The likes of Google and Apple are also expected to launch new smartphones soon. The Pixel 9 series will launch this week whereas Apple is also expected to launch new iPhones in September. Ram believes that both “new iPhones and possibly new Pixels is expected to drive significant consumer interest." Historically, older-generation iPhones have often outperformed newer models in terms of consumer spending. “However, there is a growing trend of consumers opting for the latest generation iPhones, indicating a shift in preference," adds Ram.
For Pixel, this is the first time Google is launching its foldable phone in India. Also, Pixel will get at least a month's head start on the new iPhones and it could be a potentially attractive buy during the festive season.
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