2012 Smartphone Year in Review:
The smartphones sales in India grew over 100% (year-on-year) in 2012 to reach 20 to 22 million units. For the first time, monthly sales crossed 2 million units in Q4 and smartphones breached the USD 75 price in the same quarter. Currently in India, almost all the mobile devices available over USD 150 are smartphones.
While both Nokia and Blackberry lost significant market share (faster than expected), Samsung continued its momentum from late 2011 into all of 2012 to lead the market (both in terms of volume and value). Indian handset OEMs started showing early signs of replicating their feature phones success (between 2009-11) in the smartphone space beginning Q3 & Q4 2012. By our estimates, the share of Indian players grew from sub 2% in Jan to close to 30% by Dec, 2012 (in volume). And, these players duly supported by chipset (System-on-Chip, SoC) vendors and ODMs are driving down the smartphone prices in India.
Among operating systems, Android dominated the Indian smartphone market in 2012, primarily led by Samsung and the growth of Indian players in the latter half of the year. While Symbian’s (S60) deceleration was relatively slow in the first two quarters, it lost significant share in the second half of the year primarily due to the lack of competitive device models and Nokia’s increased focus on ‘Asha’ series (primarily based on Symbian Series 40 OS). To the most part of the year, Windows Phone based devices were only available in the high end, and although more affordable Nokia Lumia 610 & 510 were launched in the second half, they failed to garner significant share for the OS. Apple has increased its focus on Indian market in the last quarter of 2012, with increased distribution, marketing spends, team augmentation and this has reflected in increased sales of iPhones.
India Smartphone Outlook for 2013:
In 2013, Convergence Catalyst estimates the smartphone sales to grow approximately by 120% to range between 44 million and 48 million, forming 30% to 32% of total mobile handset sales in the country. This growth is expected to be primarily driven by wider acceptance of smartphones by Indian consumers and the devices coming down the price curve. We estimate the sub USD 200 segment to contribute over 60% of total smartphone sales in 2013. Although, currently the user experience on the low-end smartphones (in the sub USD 75 segment) is not optimum, we expect this to be corrected towards the end of first half of the year, and the share of smartphones in the sub USD 75 segment to grow significantly in 2013. We expect Apple and Samusng to be the leading players in the over USD 450 segment with over 80% (volume) share between them. Samsung is expected to face stringent competition from local Indian players (in the low and mid tiers) and Apple (in the high end), and the company will have to work on strengthening its leadership position in the Indian smartphone space in 2013.
In 2013, Android’s dominance is expected to continue in India, primarily due to multiple devices being launched by both domestic and global OEMs, especially in the mass-market segment. Samsung’s consolidation of leadership position, growth of Indian OEMs and entry of other global players (such as Lenovo, Huawei, etc) in the smartphones space is expected to aid Android’s growth. We expect Apple’s iPhone devices sales to grow by almost 5x in 2013 (as compared to 2012) as the company leveraging its aspirational brand caters to significant pent-up demand through increased distribution, extensive marketing and innovative sales schemes. In 2013, we also expect Windows Phone share to grow over 7%, with the availability of affordable devices and Microsoft and Nokia marketing them extensively.
Other Smartphones trends for 2013 in India:
- Increase in the Total Addressable Market of >USD 450 Segment – As per our research, there exist about 24 device models in the high-end (>USD 450) smartphones space currently. In 2013, many new iconic models by various brands (such as Samsung Galaxy S IV, Nokia EOS, iPhone 5S, etc) are expected to be launched as flagship devices in this segment. The availability of multiple devices offering differentiation and catering to the aspirational consumers is expected to increase the market size.
- Smartphone Chipsets (SoCs) to Drive the Next Level of Growth – Convergence Catalyst expects 2013 to be the year of smartphone chipsets and the competition among chipset players to drive the growth of smartphones in the emerging markets. We expect smartphones in India to be available on chipsets of at least ten different players in 2013. Qualcomm, the current smartphone chipset leader, is expected to face stringent competition from Mediatek, Broadcom and Marvell in the USD 76 to USD 180 segment, and in the high-end lose share to Samsung and Apple (whose high-end iconic devices are built on indigenous Exynos and Ax series chipsets). As the LTE ecosystem starts to take off in India (in the second half of 2013), we expect other players such Altair, Renesas, etc to enter the Indian market providing solutions for a wide range of devices.
- Entry of Multiple Global and Indian Smartphone OEMs – Global players such as Lenovo, Huawei, etc., are expected to make full-fledged foray into the Indian smartphone market with wide range of devices across the portfolio and strong marketing push. Indian brands to expand their footprint and consolidate their position in the low & mid tier segments.
- Increased Reverse Bundling with Wireless Carriers – As the wireless carriers focus on increasing the adoption and usage of data-based services in India, we expect them to partner with various smartphone players offering bundled data plans with devices, especially in the sub USD 200 segment
- New Smartphone OSs to Have Little Impact in 2013 – India is primarily a follower market and is rarely a market of choice for players to launch devices on new platforms, considering the amount of resources needed for marketing and building ecosystem. So, although the world would witness smartphones on new platforms such as Sailfish (targeted at China), Firefox OS (targeted at carrier markets), Tizen (expected to be launched in late 2013) and Ubuntu in 2013, we expect only a few models of these devices to enter Indian market and have little or no impact (in terms of overall smartphone sales in 2013).
Note: Convergence Catalyst has not considered the Nokia ‘Asha’ series (based on Symbian Series 40 OS) in the Smartphone estimations for 2012
This is an abstract of Convergence Catalyst’s latest “India Smartphone Outlook 2013″ report. This year’s report includes smartphone market shares by OEMs & OSs for 2012, forecasts of 2013 market shares by ASPs & OSs along with key insights, trends and analysis. This year’s report also contains a special section on the dynamics of smartphone chipset players and their potential competitiveness in 2013 (by ASP segment). Write to info@convergencecatalyst.com for more details on the full report.
Yagna Teja contributed to the report.