As a result of consumers' continued worry, the domestic smartphone market in India expanded by a meager 1% in 2023, according to the most recent IDC research, which was made public on Tuesday. The market's 11% year-over-year growth in H2CY23, which offset the market's dramatic 10% decline in the first half, is the only positive news. In 2023, the nation shipped 146 million smartphones. With 37 million units shipped in Q4CY23, the market expanded by 26% year over year. This was mostly due to numerous new model launches in the second half of the year, which witnessed stronger-than-expected shipments.
However, the IDC analysis predicts difficulties in 2024. According to Navkendar Singh, associate vice-president, client device research, at IDC, "The road to recovery for smartphones in 2024 looks strained and elongated, as worries about income, inflationary stress, price increases, and inventories remain." He went on to say that in order to support organic growth, extra efforts must be taken, particularly at entry-level positions. The research firm projects flat to low single digit annual growth in 2024, driven mostly by financing scheme-supported upgraders in the $200–400 smartphone market.
Nonetheless, there were some obvious patterns in 2023, and one of them bodes well for customers' adoption of 5G. In 2023, 79 million 5G smartphones were supplied, with many of them being released in the mass-market price range. In 2023, the average sale price (ASP) of 5G phones fell to $374, representing a 5% YoY fall. The entry-premium ($200-$400) sector remained to dominate with a 38 percent share, however it was down from 49 percent in 2022. Meanwhile, the budget ($100-S200) segment grew its share of 5G smartphone shipments to 35 percent from 22 percent a year ago.
The most frequently shipping 5G models in 2023 were Vivo's T2x, Xiaomi's Redmi12, Samsung's Galaxy A14, Apple's iPhone 13 and 14 (which sold over 9 million units in 2023), and Samsung. The survey also revealed that shipments to online channels, which were previously the most appealing means of selling smartphones, decreased by 6%, with its proportion falling from 53% in 2022 to 49% in 2023.
Conversely, as suppliers expanded into smaller towns and cities and bolstered their retail presence with profitable premium items, offline channel shipments increased by 8% YoY.
Once more, the majority of the luxury smartphone categories were performing incredibly well, but the fall in the mass segment—where the majority of phones are sold - was cause for concern. As a result, the entry level (sub-$100) category rose by 12% YoY, and its share increased from 18% to 20%. However, shipments to the mass budget ($100–$200) category decreased, and as a result, its proportion fell from 51% to 44%.
Even the entry-level premium ($200–$400) category held steady at 21% of the market, while the mid-premium ($400–$600) segment increased by 27% year over year to a share of 5%. The premium category, which ranges from $600 to $800, grew by 23% to reach 3% of the market. However, the super-premium group (those spending more than $850) saw the greatest rise, increasing from 4% to 7% of the market.
Notable trends include the apparent customer interest in foldable phones. Over a million foldable phones were shipped, while their average selling price dropped by 4% to $1,236. Samsung was the market leader for foldable phones, but as competitors like Motorola, Tecno, OnePlus, and OPPO entered the Indian foldable phone market in 2023, its share fell to 73%.
The research also noted that Media Tek, a Taiwanese mobile chip design business, grew by 6% YoY to reach 50% of the market share against Qualcomm, its rival. The most popular MediaTek-based smartphones shipped were the T2x from Vivo, the Redmi A2 from Xiaomi, and the C55 from Realme. Qualcomm's share fell to 25%, representing a 6% YoY reduction in shipments.
Nevertheless, it's evident that feature phones are still in use today despite the buzz around smartphones. Following four years of decline, 61 million feature phones were supplied in 2023, representing an 8% YoY increase. Samsung left the feature phone market, while Reliance Jio's new 4G feature phone drove growth in the second half of 23.
