Smartphone shipments from India fell to around 31 million units in the January-March quarter, thus posting the steepest 19 percent drop in the first quarter year-over-year, market research firm Counterpoint said on Thursday.
Cell phones priced below Rs. 30,000 each saw a sharp decline, while shipments in the premium and ultra-premium category saw a 60-66 percent increase.
“This was the biggest Q1 decline seen by India’s smartphone market, as well as the third consecutive quarterly decline. Sluggish demand, high backlog of 2022 carry-over, growing consumer preference for refurbished phones and pessimistic market channel view all contributed to this decline,” said Counterpoint’s market monitoring service report.
The contribution of 5G smartphones to total smartphone shipments reached a record 43%.
“With a 20% share, Samsung led the Indian smartphone market for the second consecutive quarter. It was also the top 5G brand,” the report said.
Samsung’s new 5G-enabled A-series performed well in the offline market, contributing 50% of shipments.
Samsung’s ultra premium segment (priced above Rs. 45,000) grew by 247% YoY in the March 2023 quarter, driven by the successful launch of the S23 series and financing options, the report said.
Apple grew 50% year-over-year and acquired a 6% stake in the March 2023 quarter.
Apple maintained its lead in the overall premium segment (Rs. 30,000) as well as the ultra-premium segment (above Rs. 45,000) with 36% and 62% of the shares respectively.
The iPhone maker’s shipment was boosted by its new financing scheme with HDB Financial Services and promotions on the latest iPhone 14 series in offline channels.
“The premiumization trend is becoming stronger every quarter. The share of the premium segment nearly doubled in the first quarter of 2023 compared to the first quarter of 2022,” said Prachir Singh, senior research analyst at Counterpoint.
Singh said affordability is key here as more financial schemes are being rolled out, such as Apple’s ‘zero-entry no-cost EMI’ offers in the latest premium segment, increased trade-in offers and pressure from retailers.
“The growth of the premium segment is reducing the share of mid-rangers as consumers upgrade to more expensive smartphones,” Singh said.
Mobile phone price ranges from Rs. 20,000-30,000 saw a 33% drop in shipments, Rs. The 10,000-20,000 segment saw a 34% decline and phones priced below Rs. 10,000 saw a 9% drop in shipments year-on-year.
“We are seeing a shift in consumer behavior – demand is now concentrated in promotional periods. Earlier in the quarter there was a spike in demand in channels around the Republic Day sales period. However, demand dropped significantly after the sales period. Channel players are now focusing on getting rid of existing inventory rather than creating new inventory of new models,” said Shilpi Jain, senior research analyst at Counterpoint.
She said the bright side of the quarter came from 5G smartphones, whose contribution (43%) surpassed 40% for the first time, recording 23% year-on-year growth as consumers continued to upgrade to 5G devices.
“We believe these situations will remain similar in the second quarter of 2023, with growth returning in the second half of the year due to faster 5G upgrades, easing macroeconomic pressure and the festive season,” said Jain.
Vivo also maintained its No. 2 position during the reported quarter, with a 17 percent market share, despite a 3 percent drop in shipments year-over-year.
Xiaomi experienced a 44% year-over-year decline from Q1 2022, dropping to third place during the reporting quarter with a 16% share.
“The decline was due to weak demand in the sub-Rs 10,000 segment, greater reliance on online channels even as demand is higher on offline channels, and a mixed portfolio. The Redmi Note 12 series has received a positive response from consumers, contributing to more than 14 percent of Xiaomi’s total shipments,” the report said.
OnePlus was the fastest growing brand with 72% year-on-year growth in the March 2023 quarter.
“Among local brands, Lava has done well with its updated portfolio in the sub Rs. 10,000 segment. Lava continues to offer the cheapest 5G smartphone (Blaze 5G). It was also the third fastest growing brand in Q1 2023 with 29% YoY growth,” the report said.