India smartphone market contracts in Q4 2014, says IDC

Smartphone market declined by -4% quarter over quarter in Q4 2014 while the feature phone market plummeted by approximately -14% over Q3 2014.
India smartphone market contracts in Q4 2014, says IDC

New Delhi: India smartphone market experienced a shipment contraction in the fourth quarter of 2014 for the first time ever on a quarter over quarter basis, says IDC.

The fall in shipment is largely due to a high channel inventory at the beginning of the quarter among general trade, which in turn was caused by the surge witnessed in online sales during festive season.

Smartphone market declined by -4% quarter over quarter in Q4 2014 while the feature phone market plummeted by approximately -14% over Q3 2014.

The overall mobile phone market stood at 64.3 million units in Q4 2014, which reflects a sequential drop of -11% over Q3 2014 and an year-over-year decline of -5%.

The feature phone to smartphone transition trend is apparent. Smartphones formed a healthy 35% of the overall mobile business in Q4 2014, which is up by 13% from the same quarter a year ago.

'Smartphone vendors have been quick in gauging consumer demand for 4G handsets. In percentage terms, 4G handsets are still in single digits, but vendors who are not yet ready with a 4G portfolio are likely to miss the next wave of smartphone growth,' said Karan Thakkar, Senior Market Analyst, IDC India.

Shipment contributions from vendors like Asus, Microsoft, and HTC have witnessed traction in the recent past. Asus's growth is somewhat linked to the handset vendor itself. The Zenphone series is always in demand and often the product is out of stock at the retail counter. On the other hand, Microsoft and HTC have more aggressively priced products to offer.

'In the current market scenario there is a drive in demand for products pitched with high specifications at low price points. This trend is likely to continue over the next four to 6 quarters, after which consumers are expected to turn back to the handset vendors who charge premium for quality,' added Thakkar.

Samsung has maintained its leadership position in Q4 2014. Apple presented stiff competition for Samsung during this time, while "online exclusive" brands are hurting the brand in the value for money category, according to IDC.

Micromax witnessed an inventory correction in Q4 2014 owing to high inventories pumped into the channels during the previous quarter.

The retail presence of Intex has seen more than a twofold increase and its focused product launches and media advertisements have worked well for the brand.

Lava has slipped to the number 4 position. However, the brand remains consistent and stable with a good amount of visibility among its distributors.

Xiaomi's 'online only' strategy has paid off well. The fourth quarter was the first complete quarter for the brand. Even with minor hiccups like a temporary ban on a particular handset model, the brand made it to top 5 smartphone vendor list.

Image: Corbis

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