NEW DELHI: India’s smartphone shipments saw their highest-ever decline at 19% YoY in the January-March period, reaching over 31 million units, due to sluggish demand, high inventory build-up from 2022, growing consumer preference for refurbished phones and pessimistic channel view of the market contributed to this decline, according to Counterpoint.This was the third consecutive quarterly decline.
Senior Research Analyst Shilpi Jain said, “We are observing a change in consumer behaviour – demand is now concentrated around promotional periods. The beginning of the quarter saw a surge in demand across channels around the Republic Day sales period. However, demand dropped significantly after the sales period.
Jain said that channel players are now focussing on eliminating existing inventory instead of creating a fresh inventory of new models. OEMS must align their strategies with changed consumer and market dynamics, she added.
The quarter’s silver lining came from 5G smartphones, whose contribution (43%) crossed 40% for the first time, registering 23% YoY growth as consumers kept upgrading to 5G devices.
“We believe these situations will remain similar in Q2 2023 as well, with growth coming back in the second half of the year owing to faster 5G upgrades, easing macroeconomic pressure and the festive season,” she added.
Senior Research Analyst Prachir Singh said the premiumization trend is becoming stronger each quarter. The premium segment’s share almost doubled in Q1 2023 compared to Q1 2022.
“Affordability is the key here as we saw more financial schemes launched, like Apple’s ‘No-cost EMI with zero down payment’ through HDB Financial Services, offers on the latest premium segment launches, increase in trade-in offers and push from retailers.”
The premium segment’s growth is reducing the mid-tier share as consumers upgrade to higher-priced smartphones. The sub-Rs 10,000 price band continued to decline in Q1 2023, with its shipments falling 9% YoY.
“This segment is suffering declining demand due to an elongated replacement period, declining feature phone-to-smartphone migration and lower presence of hero models,” Singh added.
Samsung maintained its top position in the Indian smartphone market for the second consecutive quarter with a 20% share in Q1 2023. It also remained the leading brand for 5G shipments, accounting for a 24% share.
Vivo also maintained its second position in Q1 2023 with a 17% market share. Although there was a 3% YoY decline, the company’s robust omnichannel presence and cost-effective pricing helped the OEM in maintaining its position. vivo was the leading brand in the affordable premium segment (Rs 30,000-Rs 45,000, ~$370-$550) with a 40% share driven by the V series.
Xiaomi experienced a significant drop from Q1 2022, falling to the third spot during Q1 2023 with a 16% share. It suffered a 44% YoY decline, which is the largest the brand has ever recorded. The decline was due to weak demand in the sub-Rs 10,000 (~$245) segment, more dependence on online channels even when demand is higher in offline channels, and a confusing portfolio.
OPPO took the fourth position in India’s smartphone market, recording 9% YoY growth with a 12% share. The brand has been consistently expanding its shipments in the high-tier segments, focusing on the upper mid-tier range (Rs 20,000-Rs 30,000), where it saw the highest growth among all brands, registering 144% YoY growth driven by the F series.
Realme saw a 52% YoY decline in Q1 2023, resulting in the brand slipping to fifth place with a 9% share. Realme continued to face challenges such as inventory build-up and unfavourable market conditions in the sub-Rs 10,000 segment. It is now focusing on offline retail to expand its consumer base.
OnePlus was the fastest growing brand with 72% YoY growth in Q1 2023, driven by the strong demand for its OnePlus Nord CE 2 Lite and newly launched OnePlus 11 series. OnePlus’ Nord CE 2 Lite 5G was the best-selling model in Q1 2023. It captured the second spot in the premium segment (Rs 30,000-Rs 45,000 or ~$370-$550) with a 30% share. Furthermore, the brand has expanded its offline presence by opening experience stores in various cities.
Apple grew 50% YoY and grabbed a 6% share in Q1 2023. The brand maintained its lead in the overall premium segment (>Rs 30,000) as well as in the ultra-premium segment (>Rs 45,000, ~$550) with 36% and 62% shares, respectively