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India smartphone shipments decline 5% QoQ

India’s smartphone shipments grew 9% YoY but fell 5% QoQ to reach almost 37 million units in Q2 2022 (April-June), according to the latest research from Counterpoint’s Market Monitor service. The YoY growth was primarily driven by a lower base in Q2 2021 due to the second COVID-19 wave. The QoQ drop was due to macroeconomic headwinds affecting consumer demand.

Commenting on the market dynamics, Senior Research Analyst Prachir Singh said, “We saw the consumer demand declining QoQ during the quarter, especially in May and June. Consumers are preferring to repair their device or buy a refurbished one than make a new purchase. This trend is more visible in the entry and budget segments. Due to this decline in demand, almost all the brands are facing inventory issues. At the end of June, India’s smartphone market was sitting on more than 10 weeks of inventory, more than double the normal inventory size. Brands were seen aggressively promoting offers to clear this inventory and prepare for the festive season.”

Commenting on the competitive landscape and brand strategies, Research Analyst Shilpi Jain said, “India’s smartphone user base crossed the 600-million mark during this quarter. Also, the 5G smartphone penetration continued to increase. The 5G smartphone shipment share reached 29% of overall shipments in Q2 2022, which was the highest ever. The 5G auction and commercial availability will accelerate 5G smartphone adoption among users. The smartphone retail ASP (average selling price) is also witnessing a growth trend. It grew 10% YoY in Q2 2022 driven by an increasing share of the higher price segments. The >INR 20,000 price band’s share reached the highest ever in Q2 2022, crossing the 22% mark. The growth in upper and premium segments is primarily due to the availability of financing schemes aimed at increasing device affordability.”

India’s mobile handset market grew 6% YoY but fell 9% QoQ in Q2 2022. The feature phone market registered a decline of 17% QoQ primarily due to the decline in consumer demand. itel led India’s feature phone market in Q2 2022 with a 25% share. itel has been the top feature phone brand for 10 consecutive quarters.

Market Summary:

  • Xiaomi maintained its lead in India’s smartphone market in Q2 2022, though it declined 26% YoY. Xiaomi faced multiple issues like component shortages, which persisted throughout Q2, inflation and increasing competition in the entry-level segment. However, revamping the budget portfolio with the Redmi 10 series, gaining mindshare in the mid and premium segments and multiple sales throughout the quarter helped Xiaomi maintain its top position. It also captured the third position in 5G smartphone shipments.
  • Samsung held the second spot in Q2 2022 with a 14% YoY growth. It also remained the top-selling 5G smartphone brand in India. Focus on supporting multiple 5G bands in the mid segment (INR 20,000 – INR 30,000) drove Samsung’s 5G growth. Revamp of the M series, strong demand for the S22 Ultra, introduction of various financing schemes in Tier 2 cities and strengthening of own e-store aided Samsung’s growth in Q2 2022. Samsung also kept its top position in the affordable premium segment (INR 30,000 – INR 45,000).
  • vivo recaptured the third position with 22% YoY growth. Strong position in the offline segment while expanding reach in online through T-series, upgrading the sub-INR 10,000 portfolio with the Y15c and Y01, increasing local production, leaner inventory and revamping the X series in the premium segment helped vivo gain mindshare as well as market share. vivo also held the second position in 5G smartphone shipments with a 23% share driven by the T1 series.
  • realme slipped to the fourth spot in Q2 2022 but remained the fastest growing among the top five OEMs with 23% YoY growth. Diversified supply chain, aggressive distribution strategy both for offline as well as online, focus on 5G in the >INR 15,000 segment and revamp of its star C series drove realme’s shipments. However, higher inventory in channels might impact its shipments in the coming months.
  • OPPO remained consistent in maintaining its fifth position in India’s smartphone market. However, revamping the portfolio across price tiers with the A16 series in the budget segment, F21 series in the upper-mid segment and the K10 series in the lower-mid segment, expanding online reach through the newly launched K10 series and positive response from consumers led to OPPO’s 18% YoY growth in Q2 2022.
  • Transsion Group brands (itel, Infinix and TECNO) captured a 12% share in India’s handset market and held the fourth spot. itel led the sub-INR 6,000 smartphone segment with a 77% share driven by strong shipments of the A23 Pro and A27. TECNO captured the second spot in the sub-INR 8,000 smartphone segment driven by strong demand for the Spark Go 2022 and Pop 5 LTE in Tier 2 and Tier 3 cities.
  • Apple grew 63% YoY in Q2 2022 driven by a smaller base in Q2 2021 due to the COVID-19 second wave. It remained the top-selling brand in the ultra-premium segment (>INR 45,000 or ~ $650). Increasing ‘Make in India’ capabilities for both local consumption as well as exports, offline push through multiple promotions and consumers’ brand preference in the >INR 50,000 segment helped Apple retain its edge in the premium segment. The opening of its own e-store, iPhone SE 2022 and offers on other models will further drive Apple’s shipments in the coming quarters.
  • OnePlus grew 45% YoY in Q2 2022 driven by the Nord CE 2 series and OnePlus 10 shipments. OnePlus remained at the third spot in the premium segment (> INR 30,000). The brand also captured the third position in 5G smartphone shipments owing to its 100% 5G portfolio.

Counterpoint Research

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