Indian manufacturers face heat as Apple makes inroads into urban India: IDC

              Samsung, Micromax and Lenovo-Motorola own the top three slots in the smartphone market comprising the top 30 cities of India, with Apple coming to the sixth slot in this urban list.. The top 30 cities make up approximately 51 per cent of the entire smartphone market in the last quarter of 2015 with New Delhi and Mumbai generating the most demand in that order.

Samsung, Micromax and Lenovo-Motorola own the top three slots in the smartphone market comprising the top 30 cities of India, with Apple coming to the sixth slot in this urban list. The International Data Corporation’s (IDC) Monthly City Level Smartphone Tracker says the top 30 cities make up approximately 51 per cent of the entire smartphone market in the last quarter of 2015 with New Delhi and Mumbai generating the most demand in that order.

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In this list Samsung commands a 29.4 per cent market share, while Micromax has a 14.7 per cent market share and the Lenovo group 10.3 per cent. While Samsung has found some steam recently with the J-series and the online-only ON series, Micromax continues to rake in volumes in the sub $100 segment where it is facing stiff competition from new entrants. Lenovo attributes its success to the K3 Note, Vibe P1M and Moto G 3rd gen. Intex and Lava hold the fourth and fifth slots.

Apple has come back in contention with a 42.1 per cent share of the above $300 smartphone market with the launch of iPhone 6S & 6S Plus along with the price correction of the iPhone 5S, 6 and 6 Plus.

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Jaideep Mehta, Managing Director, IDC South Asia said the increasing data penetration and enhanced reach of e-commerce is making smartphone consumers in Tier 2&3 cities is becoming more aware and demanding. “They want a smartphone with latest the features & specifications, affordable prices, and convenient buying options. The coming 4G revolution is promising to trigger the next wave of smartphone growth with 4G enabled devices already overtaking 3G devices as the largest smartphone category,” he said.

Incidentally, 25 major Tier 2 & 3 cities account for around 21.3 per cent of Indian smartphone market where the majority of the demand is still for 3G models.

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“There is a clear trend of migration from feature phones to low end smartphones in smaller cities and towns, making these markets the next growth engine for the smartphone industry. With the first time mobile phone users coming on a smartphone, it will be their only connected device which meets all of their internet and entertainment needs,” adds Swapnil Bhatnagar,Research Director, IDC India.

In fact, these are the markets where the affordable smartphone models from Indian vendors make up more than two-thirds of the sub $100 smartphone segment. “But Chinese vendors like Lenovo, Motorola are Xiaomi are gaining market share in these cities due to their superior positioning as quality brands, with a value for money proposition,” he added.

Another interesting trend is the how the online channel is disrupting the traditional distribution channel by offering a compelling value proposition to the customers in terms of better price, convenience and product range. Top five cities of India make up approximately 60 per cent of the online smartphone sales in India.

25 major Tier 2 & 3 cities account for around 21.3 per cent of Indian smartphone market where the majority of the demand is still for 3G models.

Now, 4G devices make up around 45.0 per cent of the market in these cities, while global vendors like Apple, Samsung and others hold more than 40.7 per cent of the market in these cities.

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“Flash sales and online exclusive smartphone models are a big hit with Indian consumers and these are being used as marketing tools for building excitement and hype,” adds Navkendar Singh , Senior Research Manager, IDC India. “However, the Online/Offline price disparity continues to be a major concern for channel partners of most vendors across cities” says Singh.

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