India’s smartphone market declined by 1% YoY in first half of 2022: IDC

IDC survey reveals, due to inflation and high input costs, there is a decline in smartphone market by a per cent in the first half of 2022

India smartphone market decline

According to the IDC’s worldwide quarterly mobile phone tracker, 35 million smartphones were shipped to India in 2Q22 (April-June), a 3 per cent year-over-year growth, while the first half of 2022 declined by a per cent YoY to 71 million units. The second quarter of the year normally has seasonally strong demand compared to the first quarter, but dwindling consumer demand led to a decline of 5 per cent quarter-over-quarter (QoQ).

“The primary challenge in 2021 was around supply constraints, which have eased considerably. However, the market is now facing demand contraction in 2022 due to rising inflation and higher input costs, leading to higher market prices. As a result, the inventory cycles are increasing across brands and channels,” said Upasana Joshi, Research Manager, Client Devices, IDC India.

Key highlights from 2Q22:

The online channel reached a share of 52 per cent with 5 per cent YoY growth; this is expected to stay strong in the 2H22 (Jul-Dec) festival season, with more promotions during the sales events by e-tailer platforms. The offline channel registered flat growth of 1 per cent after declining YoY for three consecutive quarters.

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The ASP (average selling price) has grown consistently QoQ since 4Q20, reaching a new high of US$213 in 2Q22, a growth of 15 per cent YoY.

UNISOC’s share continued to rise, reaching 17 per cent in 2Q22 while MediaTek’s share dropped to below 50 per cent, which has not been seen since 2020. The shipment and shares of Qualcomm and Samsung-based smartphones increased.

11 million 5G smartphones were shipped with an ASP of US$377. 51 million 5G smartphones have shipped from 2020 to 1H22, and they are expected to cross 50 per cent market share by 2023.

The premium segment of US$500+ was the highest growing segment with 83 per cent growth YoY, contributing 6 per cent of the market. Apple continued to dominate with 53 per cent share, followed by OnePlus (19 per cent) and Samsung (15 per cent). The mid-range segment of US$200-US$300 accounted for 17 per cent of the market, growing by 21 per cent YoY and continues to be focus area of vendors with several model launches slated in the next few months. The highest decline was in the sub-US$100 segment, which was down to 17 per cent share of the market from 22 per cent a year ago.

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“5G smartphone supplies are much better than 4G, leading to higher ASPs but lower demand. The mass segment of below US$200 has seen fewer new launches. On top of this, inflationary stress is impacting consumer demand and is not expected to ease anytime in 2H22. These factors will certainly impair 2022 to be flat,” says Navkendar Singh, Associate Vice President, Devices Research, IDC India, South Asia & ANZ.