India has now overtaken the U.S. in becoming the second biggest smartphone market after China, according to a new report from Canalys. The U.S. has been sitting at second place until the third quarter of this year, the research firm said.
Positive outlook for Indian smartphone market
In the second quarter, the Indian smartphone market did not do that well, but it recovered in the third quarter with shipments growing 23% year on year to 40 million units, according to Canalys. India ousting the U.S. in the smartphone market has long been expected, given the massive difference in population size between the two nations, but recent developments, including demonetization in late 2016, slowed the progress.
“This growth comes as a relief to the smartphone industry. Doubts about India’s market potential are clearly dispelled by this result,” said Canalys analyst Ishan Dutt, in a blog post. Further, Dutt notes that the country has over 100 mobile device brands, and more new brands are coming every quarter. The analyst expects the growth to continue with main drivers being the explosion of the LTE and low smartphone penetration.
Canalys is also positive on India following the GST implementation. “The Indian economy is proving very strong in the second half of 2017, now that the twin shocks of GST and demonetization are behind it,” said Canalys analyst Rushabh Doshi. China, who overtook the U.S. to become the biggest smartphone market in 2013, is still far ahead with over 110 million shipments.
Samsung and Xiaomi top vendors
Samsung and Xiaomi accounted for almost half of the total shipments with 9.4 million and 9.2 million units, respectively. Overall, Samsung, Xiaomi, Vivo, OPPO and Lenovo accounted for 75% of the total shipments in the country. The Korean firm witnessed a 30% rise in shipments in the quarter, while Xiaomi managed a 290% jump compared to the same quarter last year. Not just in India, a country that Xiaomi focuses on a lot, but on a global scale, Xiaomi performed better than expected.
Xiaomi recently opened a second factory in India. The Chinese firm enjoys a good hold in the low-end Indian smartphone market, but it struggles in the mid-range segment (between $230 and $310), where Samsung, OPPO and Vivo are strong. Samsung also announced plans to double the size of its existing production plant in the country. After the expansion, the Korean company will be able to produce 10 million smartphones per month, according to Android Authority.
Apple is nowhere in the scene given the high price of the iPhone, which makes it difficult to gain a wider adoption. Despite this, Apple shipped a record 2.5 million iPhones to India in 2016, and the iPhone shipments doubled to 900,000 units in the third-quarter, compared to the same period last year.
Going ahead, Apple’s share in the Indian smartphone market is expected to increase, considering Apple has started local production earlier this year. The U.S. firm also plans to open its first physical retail store in the country by 2018. Further, the company is also reportedly planning to open four to five flagship-class stores over the next five to ten years, notes MacRumors.