The sector is set to dial up the numbers this year by recording unprecedented growth thanks to a ‘new normal’ in social and economic activity.
India’s smartphone sector is set to dial up its performance in the new year by being poised to smash through the pain points of 2020, due to the pandemic and economic strife, to record a possible growth between 12-21%.
The last two years have seen smartphone sales being slightly muted. According to observations sales grew in 29% in 2015, fell 5% in 2016 owing to demonetisation, recuperated to 14% in 2017 and 2018, as per IDC India. But in 2019, it grew at 8% and is expected to end 2020 flat year-on-year due to the aftereffects brought about by the pandemic.
According to the research gathered by the International Data Corporation (IDC) India smartphone tracker, which tracks monthly shipments of smartphone into the market, smartphone sales surged during the festive season last October with a massive year-over-year (YoY) growth of 42% in October shipping 21 million units. The growth was driven by multiple online sale festivals sales and continuing pent up demand from 3Q20. This is the highest ever October shipments and second highest for a month, following 23 million units in September 2020, an all-time high for a single month.
With tech calling the shots in the face of a new world of business processes the smartphone is more than its weight in gold. India, which is tipped to become the world’s go-to venue for doing business, is already making a statement of intent in the field of electronics, telecommunications and technology. Statista.com has observed that the humble smartphone will find a staggering 760 million users in India in 2021, with the number of smartphone consumers worldwide forecasted to exceed to 3.8 billion users in 2021.
The focus now needs to be on smartphone penetration rates in India as the country gears up towards regaining its economic sweet-spot. India has already gone past the United States in the number of smartphone users in 2017. Despite this, however, the US has a higher penetration rate than India which was supposed to reach a penetration rate of more than 28% in 2018, a target which the US had already hit in 2011.
Consulting firm KPMG had estimated, in a joint report with the Indian Cellular and Electronics Association, that rural India witnessed a year-on-year growth of 35% in 2018 as opposed to 7% growth in urban India in the same period in terms of internet users. Smartphone penetration in rural India has risen from 9% in 2015 to 25% in 2018. India’s smartphone base is now poised to reach 820 million in the next two years opening up lag times in doing business with 80% spike in efficiency and reduction in processing time of 8 times for e-governance services according to a new study. These movements have become starkly visible as the Indian economy is reenergized in its fight against the pandemic with as many as four Covid-19 vaccines currently at its disposal to treat and arrest infection rates.
The smartphone segment has witnessed huge demand after the easing of the lockdown largely due to a pent-up need brought about by work and studies. The tech brands were reportedly struggling to feed this hunger. Thanks to the lockdown, the smartphone became the most reliable ally for people promoting connectivity.
According to a study done by Vivo usage went up 25 per cent to almost seven hours a day after the pandemic as people spent more time on their phones working, calling, consuming OTT (Over The Top) services like Netflix and Spotify, gaming, browsing through social media and even taking more selfies.
This year the momentum will not slack, thanks to the possibility of high economic growth brought about by increased consumer spending and with brands pushing forward with ambitious product strategies to feed the consumer’s requirements. With the launch of its low-cost 4-G smartphone, valued at $54, Reliance Jio is also poised to jump into the deep end of this market pool.
It is now time to take a closer look at the smartphone brand foodchain in India as the theme for Make in India gathers pace. Four out of the top smartphone brands are Chinese with Samsung being the sole exception. This skew needs to be addressed and the government is catering to the ever increasing demand for smartphones through its Production Linked Incentives (PLI) schemes.
It is reported that a total of 16 proposals were cleared ensuring that phones worth INR.10.5 lakh crores would be manufactured in India over the next five years. The more established brands also followed suit by scaling up their operations. And now with the advent of 5-G, the innocuous but highly essential smartphone is set to make a ringing endorsement for itself in India’s economic firmament.