Luxury phones will drive volumes in 2023
New Delhi: High-end Apple, Samsung and OnePlus smartphones will be driving higher sales in 2023, as the Indian consumer upgrades to premium devices at a faster rate than the previous years to mark a clear shift in consumption patterns, analysts said.
Growth trend in 2023 will be fuelled by consumers moving to 5G-enabled handsets, smartphones with larger storage, and new form factors such as foldable or flip phones being offered by more brands, as retailers and smartphone brands offer better financing schemes and buy-now-pay-later plans.
Apple’s renewed push in the Indian market may also influence consumers to shift to premium devices as they upgrade their 4G handsets. “Premium segment is likely to grow over last year to reach 13% by volumes this year, and other segments may decline. Consumer demand is changing, and taking to more high-end phones largely due to more financing options. At the same time, the transition from 2G to 4G is also slowing, and entry level segment is seeing degrowth,” said Prachir Singh, senior research analyst at Counterpoint Research. The research firm specializing in products in the technology, media and telecom industry pegs India’s smartphone market at $38 billion. In 2022, Apple had a 42% premium segment market share, followed by Samsung at 24% and OnePlus at 14%.
“Apple is also likely to drive iPhone sales in India this year, with the iPhone 15 coming later in the year which will prompt price cuts for iPhone 14 and Pro. They are likely to do up to 7 million phones this year in India, up from 6-6.2 million in 2022,” said Navkendar Singh, associate vice president, devices research at IDC India, South Asia, and ANZ.
India’s smartphone market is historically driven by large volumes of entry level or budget phones owing to the price sensitive nature of consumers, while the premium segment, which is upwards of ₹30,000, remained a marginal contributor. However, 2022 saw premium segment volumes rise to 11% and 35% by value of total sales.
Singh said the highest selling premium segment smartphone was iPhone 13 in 2022, with a base price of ₹79,000, but was being offered at under ₹65,000 after discounts and easy payment plans.
India has a large base of 4G smartphones, which will now get upgraded to 5G devices of ₹15,000 or more. This, according to a section of telecom sector executives, may drive sales in the mid-segment. However, replacement cycles for phones has increased from the earlier 18-20 months to 36 months. High inflation and low disposable income of consumers was also impacting entry-level and mid-segment smartphone volumes as consumers delayed purchase decisions.
“Premium smartphone segment consumers are immune to the recessionary forces, and consider their smartphone as an extension of their lifestyle,” Prabhu Ram, head of industry intelligence group, CMR, said.
Premium segment entrants such as OnePlus, Xiaomi, Vivo, Oppo, Honor, Motorola and Tecno, are upping the ante in the entry- and mid-premium Android segment, while some companies are betting big on foldable handsets, on the back of the success enjoyed by Samsung in foldable smartphones, that are priced
