technology

Indian smartphone owners focused on price not features

August 12, 2015

IDC says that the reason for the smartphone growth in India is in part to do with finding new ways to reach consumers, such as online retail. – Reuters pic, August 12, 2015. Within the next two years, India will have overtaken the USA as the world's second-largest smartphone market.

However, at the moment that growth is still being driven by affordable handsets and consumers finally ditching their feature phones for something with internet access, rather than by the online economy or connected lifestyles.

New data from International Data Corporation (IDC), published yesterday, shows that over the past three months, some 26.5 million smartphones were shipped to India.

That's a 44% jump on the same period in 2014, but more importantly a return to growth following what the company describes as a "sluggish" start to the year for the country, when shipments were 19% lower.

IDC says that the reason for the upturn is in part to do with finding new ways to reach consumers, such as online retail: "eTailers have opened additional avenues for growth for many vendors in India, who would have otherwise struggled to get a hold in the complex distribution network," said Kiran Kumar, Research Manager with IDC's India Mobile Phone team.

When technology companies, be they Facebook, Samsung or Google, talk about the next billion internet users, it's India more than any other territory on which they're focused.

It's why in 2014 Google announced the Android One initiative, which would bring sub-US$100 handsets to emerging market consumers, and is why Facebook has invested so heavily in internet.org.

In February, the world's largest social network brought the Internet.org initiative to India, enabling the population in six Indian states – Tamil Nadu, Mahararashtra, Andhra Pradesh, Gujarat, Kerala and Telangana – to access up to 38 different internet sites via mobile, free of charge, thanks to partnerships with tech companies, device makers and network operators.

However, take up of both has been slow. IDC notes that local phonemaker Micromax, which is backing the Android One initiative with a range of handsets priced between US$100 and US$150, struggled to make an impact even if the firm has retained its position as the second most popular smartphone brand in the country with a 17% market share.

The research and insights firm also points to the fact that in India, almost 50% of smartphones shipped over the second quarter of 2015 were of the sub-US$100 variety.

That's a price point where Samsung is very competitive and why it has retained its position as the country's most popular smartphone brand with a 23% market share.

IDC's figures come a day after Google admitted initial response to its affordable handset initiative had been disappointing and that it would be rebooting Android One in order to develop handsets that cost as little as US$47 in India. – AFP Relaxnews, August 12, 2015.