India has become the third largest global smartphone market, overtaking Japan in the first quarter of 2013, according to a report by Strategy Analytics. India has for the first time achieved third place after China and the U.S., who hold the top two positions.
Pace of Growth Highest for India
The pace of growth in India is four times faster than the world average with 163 percent year on year growth in the first quarter, according to Strategy Analytics. Compared to India the volumes in the rest of the world are swelling 39 percent. The report also mentioned that growth in the Indian market is more than that of China (86 percent YoY), Japan (24 percent YoY), and the U.S. (19 percent YoY) — and “almost all other major countries”.
Reasons for Growth
The massive and growing population, rising income of the middle class and growing demand for consumer electronics are some of the reasons that are driving smartphone growth in India. In Europe and Japan, the smartphone market is on the verge of saturation. Developed markets are saturated, so companies like Apple Inc. (NASDAQ:AAPL) and Samsung are focusing on emerging markets in order to continue growth.
According to analysts, phone makers Apple Inc. (NASDAQ:AAPL), Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) and domestic mobile manufacturer Micromax are enhancing smartphone volumes in India backed by better distribution networks.
European Market Slimming
According to IDC, the developed Western European market slimmed more than expected in the first quarter. Total shipments declined 4.2 percent year on year to 43.6 million units. The decline in the European market is putting maximum pressure on market shares of Apple Inc. (NASDAQ:AAPL). According to IDC, the market share of iOS declined from 25 percent in the previous quarter to 20 percent in the first quarter.
Apple Gaining in India
Apple Inc. (NASDAQ:AAPL) is garnering shares in India though it is declining in Europe. In March, per IDC, Apple Inc. (NASDAQ:AAPL) took the second spot in terms of revenue in India. The iPhone maker claimed a 15.6 percent share in the fourth quarter of the last fiscal year after only a few smaller local retailers agreed to distribute the iPhones. The amortized payment plans offered by Apple, in order to bring down the upfront cost of buying Apple devices, is gaining popularity. The company applied the strategy to give competition to Android powered phones.
Strategy Analytics disclosed another interesting fact—domestic brands of mobile phones are growing at the fastest pace in India. Micromax, Karbonn and Spice have a growth rate in the range of 200 percent and 500 percent on an annual basis.