Smartphone sales in India close to 100 million in 2015

India is emerging as a hot destination for smartphone manufacturers, with some reports suggesting India could surpass the US as the second-biggest market for smartphones by 2017.

Cashing in on the craze for smartphones, Indian mobile handset sellers sold around 95 million devices in the county in 2015. In fact, 40 percent of the 235.6 million units of mobile handsets sold were smartphones and this figure is expected to around reach 130 million out of 250 million units in 2016.

According to a study conducted by Cybermedia Research, of the 95 million smartphones sold in 2015, 30 percent were 4G enabled, with numbers expected to be between 5 million and 60 million devices by the end of 2016. The sale of smartphones grew at 18 percent while feature phones registered a sharp decline of 27.1 percent in annual shipments last year.

The introduction of new technologies, affordability by the burgeoning middle class, and a downturn in China's market have spurred the growth of the mobile handset market in India, whose mobile subscriptions crossed 1 billion last year.

To meet the spurt in the demand, 20 mobile phone manufacturers launched new products, taking the total number of brands to 431 in the country last year. Going by the growth, reports suggest that India might well surpass the United States as the second-biggest market for smartphones by 2017.

Samsung, which released the curved design Edge series last year, remained the market leader, followed by Micromax, Intex, and Lenovo, who also made significant gains, the study said.

"Anecdotally, the ASP (average selling price) for a smartphone in 2013 was 13,000 rupees (41 million devices), which has come down to 10,700 rupees (95 million units) by the end of 2015. The prices are expected to come down below 10,000 rupees in 2016," the study pointed out.

Interestingly, a Delhi-based firm Ringing Bells on Thursday announced the launch of the world's cheapest smartphone at 251 rupees (approximately $3.66), which has created ripples in the market, though doubts have surfaced over its durability.

Another reason attributed to the increased sales of smartphones is the launch of 4G services by major telecom service providers. While Vodafone and Airtel are already offering 4G services, Reliance group soft launched the service last year and its commercial launch is expected by May this year.

Whether India is ready for 4G enabled services in view of its poor network, lack of allotment of adequate spectrum for operators, and related problems is altogether a different issue.

However, lead analyst & practice head at Cybermedia Research Faisal Kawoosa told ZDNet that the launch of 4G services will be a success in the country. "Some fine-tuning is taking place and I think we are all set to launch the services across the country," he said.

He further said that the telecom industry was witnessing a transition from mass to niche, feature phones to smartphones, 2G and 3G to 4G, "offline only" to hybrid -- that is, a combination of offline and online -- and "imports only" to domestic manufacturing with imports. "This transition phase is bound to result in a contraction of the market in volume terms, which is what we saw towards the end of calendar year 2015, in particular," Kawoosa said.

"Once this transition is over and vendors adopt the right mix of sourcing and marketing, and develop competencies to address the emerging/niche segments rather than the mass market, we should see the market rebound back," he added.

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