Smartphone industry expects double-digit revenue growth this year; Apple, Samsung to lead

smartphones

Apple and Samsung are set to lead India's smartphone industry's revenue to $45.6 billion (Rs 3,75,516 crore) in 2024, a growth of 14 percent from the previous year, driven by the premiumisation trend and widespread adoption of 5G devices, executives and market trackers have told Moneycontrol.

Favourable monsoon, rising discretionary spending, and an anticipated increase in rural demand, as smartphone companies expand further into the country, would also contribute to the growth, they said.

“The growth is expected to be higher in 2024 compared to the last few years due to the rising trend of premiumisation, with OEMs strategically launching models in higher price segments to prioritise profitability,” said market tracker Counterpoint Research analyst Shubham Singh.

Counterpoint and rival Canalys estimate the revenue to grow 14 percent year-on-year, with Apple, Samsung, Vivo, OnePlus and Oppo emerging as the top 5 players by value market share.

The volume growth in phone shipments is also anticipated in the high single digits.

The industry reported a revenue of $40 billion in 2023.

Canalys senior analyst Sanyam Chaurasia said the growth would be mainly because of higher prices. “The average selling prices (ASPs) are expected to rise as brands pass on increased costs from offline channel investments and components to consumers,” Chaurasia said.

As per Counterpoint analysis, India's smartphone market value was up by 18 percent in the January-March quarter of the calendar year 2024. “Among the top brands, Samsung and Apple are expected to continue their lead in terms of value in 2024 as well,” Singh said.

Chaurasia said that Samsung and Apple would remain key contributors but brands like Realme, Xiaomi, POCO, OnePlus and Motorola, which focused on online sales but are now expanding into mainline retail, making a significant contribution as well.

“These brands have adopted aggressive pricing strategies and expanded their mid-high-end portfolios for 2024,” Chaurasia said.

Muralikrishnan B, president of Xiaomi India, told Moneycontrol they eagerly looking forward to a good 2024 following several challenging years for the industry, which took time to recover from the covid disruptions.

“What’s interesting is the growth in the ASP. Therefore, we expect revenue growth to outstrip volume growth. Revenue growth could even be in the low double digits,” he said.

Demand for 5G smartphones and requirements for higher specifications is driving the overall ASPs. Financing solutions and affordability offers are allowing consumer to buy more expensive devices, he said.

“We look forward to 2024 after quite a few years of slightly challenging times of volume and value,” Muralikrishnan said.

Navkendar Singh, associate vice president of devices research at IDC, said 2022 experienced a decline as 2021 was driven by pent-up demand from the Covid year. "2023 showed minimal growth, resulting in an overall stable year. However, we expect significantly better revenue growth in 2024,” he said.

Increased availability of financing schemes for lower-priced handsets on company platforms is contributing to the growth, Singh said.

Favourable monsoon conditions, rising discretionary spending and growing rural demand augur well. Smartphone companies are pushing for deeper market penetration, supported by expanded distribution in lower-tier cities, Singh said.

Canalys forecasts a 5 percent market growth fuelled by upgrades from devices purchased by consumers during 2021. While 5G upgrades will persist this year, brands aim to differentiate beyond 5G capabilities, emphasising long-term drivers like device experience and seamless ecosystem integration.

The premium category, priced above Rs 30,000, is expected to grow by more than 20 percent in the calendar year 2024 from the previous year. The category cornered 51 percent value share of the overall Indian smartphone market, Counterpoint said.

While the broader availability of 5G smartphones is driving down the ASP year-on-year, analysts said the increased volume growth of these devices in the Rs 13,000-25,000 price band is helping to raise the overall market ASP.

The market share of devices under $100 was 27 percent in 2020 but it decreased to 19 percent in 2023, which fell further to 15 percent in the first quarter of 2024 as more customers move to mid-range and premium 5G devices, IDC’s Singh said. “This overall increase in volume in upper price bands is increasing the smartphone industry ASP,” he said.

In Q1 2024, 5G penetration in the Rs 10,000-Rs 20,000 price band has already surpassed 75 percent, according to Counterpoint's Singh. Brands are expected to continue the trend of premiumisation by launching higher-priced smartphone models and the shift will likely increase both ASP and the share of the premium price segment, he said.

Chaurasia expects smartphone companies to intensify their ultra-low-end (sub-Rs10,000) 5G offerings in the second half of 2024. “However, component cost pressures will force compromises on other specs, making the next price band the sweet spot for better utility 5G devices this year,” he said.