Market research firm Counterpoint said on Thursday that India’s smartphone shipments plunged to nearly 31 million units in the January-March quarter, registering the biggest decline of 19 per cent in the first quarter on a year-on-year basis.
Mobile phones priced below Rs 30,000 saw a sharp decline, while the premium and ultra-premium category saw a 60-66 per cent growth in shipments.
“This was the biggest decline ever witnessed by India’s smartphone market, apart from the third consecutive quarter of decline. Sluggish demand, high inventory build-up from 2022, rising consumer preference for refurbished phones and pessimistic channel outlook of the market contributed to this decline,” Counterpoint’s Market Monitor Service report said.
The contribution of 5G smartphones to the total smartphone shipments reached a record 43 per cent.
“With 20 per cent share, Samsung led the Indian smartphone market for the second consecutive quarter. It was also the top 5G brand.”
Samsung’s new 5G-enabled A series performed well in the offline market and contributed 50 per cent of the shipments.
The report states that Samsung’s ultra-premium segment (priced above Rs 45,000) grew by 247 per cent in the March 2023 quarter, driven by the successful launch of the S23 series and financing options.
Apple grew 50 percent YoY and gained 6 percent share in the March 2023 quarter.
Apple maintained its lead in the overall premium segment (Rs 30,000) as well as the ultra-premium segment (above Rs 45,000) with 36 per cent and 62 per cent shares, respectively.
The iPhone maker’s shipments were fueled by its new financing scheme with HDB Financial Services and promotion on the latest iPhone 14 series across offline channels.
“The premiumization trend is getting stronger with each passing quarter. Prachir Singh, senior research analyst at Counterpoint, said the share of the premium segment is set to almost double in Q1 2023 as compared to Q1 2022.
Singh said affordability is the key here as more financial schemes are being launched, such as Apple’s ‘no-cost EMI’ With ‘zero down payment’ offers on the latest premium segment, increase in trade-in offers and push from retailers.
“Growth in the premium segment is eroding the mid-tier share as consumers upgrade to higher priced smartphones,” Singh said.
Mobile phones priced in the Rs 20,000-30,000 range saw a 33 percent decline in shipments, the Rs 10,000-20,000 segment saw a 34 percent decline, and phones priced below Rs 10,000 saw a decline of 9 percent. registered a decline.
“We are seeing a change in consumer behavior – demand is now concentrated around the promotional period. The channels saw a spike in demand around the Republic Day sale period at the beginning of the quarter. However, demand declined significantly after the sale period. Channel players are now focusing on getting rid of existing inventory rather than inventing new models, said Shilpi Jain, senior research analyst at Counterpoint.
He said the silver lining of the quarter came from 5G smartphones, whose contribution (43 per cent) crossed 40 per cent for the first time, registering a growth of 23 per cent as consumers continued to upgrade to 5G devices.
“We believe these conditions will remain the same in Q2 2023 as well, with growth returning in the second half of the year due to 5G upgrades, easing macroeconomic pressures and the festive season,” Jain said.
Vivo maintained its second position with 17 percent market share during the reported quarter, despite a 3 percent decline in shipments.
Xiaomi experienced a 44 percent decline from Q1 2022, falling to the third spot during the reporting quarter with a share of 16 percent.
“The decline was due to weak demand in the sub-Rs 10,000 segment, over-reliance on online channels and confusing portfolio even when demand was high in offline channels. The Redmi Note 12 series received a positive response from consumers, contributing to over 14 percent of Xiaomi’s total shipments,” the report said.
OnePlus was the fastest growing brand in the March 2023 quarter with an annual growth of 72 percent.
“Among local brands, Lava did well in the sub-Rs 10,000 segment with its refreshed portfolio. Lava continues to introduce the cheapest 5G smartphone (Blaze 5G). It was also the third fastest growing brand in Q1 2023 with 29 per cent YoY growth,” the report said.
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