Indian smartphone market declines for first time in Q4; Chinese handset maker Xiaomi makes it to the top 5: IDC

25 Feb, 2015

Indian smartphone market declined for the first time ever in the fourth quarter of 2014, largely owing to a high channel inventory at the beginning of the quarter among general trade, which in turn was caused by the surge witnessed in online sales during the festive season. The quarter was seen as a correction phase wherein the smartphone market declined by 4 per cent, while the feature phone market declined by about 14 per cent over Q3, 2014.

The overall India mobile phone market (smartphones and feature phones) stood at 64.3 million units in the quarter, recording a year on year decline of 5 per cent over Q4, 2013, and a quarterly decline of 11 per cent. The steep fall can be attributed majorly to the feature phone category, according to a report by International Data Corporation (IDC).

Table 1 (3) The feature phone to smartphone migration trend was clearly visible in the quarter. Smartphones accounted for 35 per cent of the overall mobile business in the quarter, which was up by 13 per cent from the year ago quarter.

"Smartphone vendors are quick in gauging the consumer demand for 4G handsets. In percentage terms, 4G handsets are still in single digit. But vendors who are not yet ready with the 4G portfolio are likely to miss the next wave of the smartphone growth story," said Karan Thakkar, senior market analyst, IDC India.

Top smartphone vendors

Samsung maintained its leadership position with 22 per cent market share in Q4, 2014. While Cupertino-giant Apple posted stiff competition to Samsung during this time, online exclusive brands are also hurting the brand in the 'value for money' category.

Micromax came second with 18 per cent market share. The brand witnessed an inventory correction in the quarter owing to high inventories pumped into the channels during the previous quarter.

While Intex Technologies, an Indian mobile, IT and consumer electronics company, did not feature in the top five smartphone vendor list until Q3, 2014, the brand managed to clinch the number three spot in Q4, 2014 with eight per cent market share.

Table 2 (2)

Lava and Xiaomi completed the top 5 with seven and four per cent market share respectively. Chinese smartphone manufacturer Xiaomi 'online only' strategy has paid off well, and Q4, 2014 was the first complete quarter for the brand. Even with minor hiccups like temporary ban on a particular handset model, and being available only through online channel (exclusively on, the brand made it to top 5 smartphone vendor list.

"In the current market scenario, there is a drive in demand for products pitched with high specification at low price points. This trend is likely to continue over the next four to six quarters, post which consumers are expected to turn back to the handset vendors who charge premium for quality," said Thakkar.

In the overall mobile phone market, Samsung, Micromax, and Nokia clinched the top three positions (in that order) with 17, 15 and 10 per cent market share respectively. Lava and Intex completed the top 5 with both having eight per cent market share.

What's in store?

While IDC anticipates a sluggish Q1, 2015, a few global vendors which were in the inventory correction phase until now are likely to exhibit big shipment numbers in the quarter.

"Operators are gearing up for 4G network rollout. For vendors and ecosystem partners, greater emphasis on 4G enabled handsets at competitive price points will be the order of the day. End users' desire to upgrade and keeping abreast with the latest technology will continue to drive a strong growth for the smartphone market in CY 2015," concluded Kiran Kumar, research manager, Client Devices, IDC India.