Indian smartphone market shrinks 1.7% in 2020, Chinese firms dominate: Report

After years of continuous growth experienced by the Indian smartphone market, it has seen a decline of 1.7% YoY for the first time in 2020, as reported by IDC(International Data Corporation). Despite the decline, Chinese smartphone company Xiaomi managed to lead in terms of market share in Q4 2020 and total 2020. The report mentioned that India left 2020 with 150 million smartphones.

As per the analysis undertaken by the firm, India saw an almost 2% drop in the smartphone market with 150 million devices. The report stated that stay-at-home mandates, remote work, remote education, travel restrictions, and manufacturing shutdowns led to a slow first half of 2020, which resulted in a -26% YoY decline.

However, with the re-opening of markets and loosened restrictions, the second half of 2020 experienced 19% YoY growth as lockdowns and other restrictions led to an urgent need for devices for entertainment, work from home, and online education, which ultimately resulted in higher demand for consumer devices like smartphones, notebooks, and tablets as users adapted themselves to remote working and learning.

The IDC report mentioned that Xiaomi, a Chinese smartphone giant, held the maximum market share with 27% in Q4, which accounts for 12 million devices, and the same share throughout the year, which represents 41 million units.

Samsung grabbed the second spot in the list with a 17%(7.7 million units) of the market share in Q4 2020, but an annual market share of 20%(29.7 million devices). Samsung continues to perform well in the mid-range smartphone market.

Vivo, with 17%(7.6 million units) market share in Q4 2020 and 18%(26.7 million units) in the annual share, grabbed the third spot. Vivo, surprisingly, experienced 12% overall YoY growth in 2020. 

The firm also analyzed the market trends for 2020. Online channels experienced 12% annual growth and constitute 48% of the market share in 2020. Multiple sale events, promotions, discounts, and affordability initiatives are the reasons for a whopping 51% market share in Q4 2020. Interestingly, MediaTek processor-based smartphones, with 43% market share in 2020, hold a larger market share as compared to Qualcomm Snapdragon-powered devices.

IDC believes that the Indian smartphone market will rebound strongly. Navkendar Singh, Research Director, Client Devices & IPDS, IDC India, mentioned that the growth experienced in the latter half of 2020 shows the importance of smart devices in our day-to-day lives and he believes that the Indian smartphone market will grow in high single-digit in 2021 as customers looking for an upgrade and the introduction of affordable 5G smartphones.

Interestingly, 3 million 5G devices were shipped in India during 2020. The main reason for this is expected to be aggressively-priced smartphones launched by Chinese manufacturers like Xiaomi’s Mi 10i and Realme’s X7. However, due to the lack of 5G networks in India and higher prices, the adoption was limited in this segment.

With the Indian government allowing 5G trials, more 5G devices are expected to enter the market with varying price points for different segments. Upasana Joshi, Associate Research Manager, Client Devices, IDC India, believes that the ASP(Average Selling Price) of 5G devices is expected to rise as 5G is currently a novelty but it will turn into a necessity with time.