Smartphone shipment in India observed its first drop in Q4, according to IDC. The decline was attributed 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.
Q4 was seen as a correction phase when the Smart Phone market shrank by four percent while the feature phone market plummeted by about 14 percent over the previous quarter. The overall mobile phone market stood at 64.3 million units in Q4, which reflects a sequential drop of 11 percent over Q3 and an annual drop of five percent in 2014.
The feature phone to smartphone migration trend is clearly visible as smartphones formed a healthy 35 percent of the overall mobile business in Q4, an increase of 13 percent fom a year ago.
“SmartpPhone vendors are quick in gauging the consumer demand for 4G handsets. In percentage terms, 4G handsets are still in single digit. But vendors who are not yet ready with the 4G portfolio are likely to miss the next wave of Smart Phone growth story,” said Karan Thakkar, Senior Market Analyst of IDC India.
Shipment contribution from vendors such as ASUS, Microsoft and HTC has 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 has more aggressively priced product to offer.
“In the current market scenario there is a drive in demand for products pitched with high specification at low price points. This trend is likely to continue over the next four to six quarters, post which consumers are expected to turn back to the handset vendors who charge premium for quality,” added Thakkar.
IDC anticipates a sluggish Q1 2015. However, few global vendors which were in the inventory correction phase until now are likely to exhibit big shipment numbers starting Q1.
“Operators are gearing up for 4G network rollout. For vendors and ecosystem partners, greater emphasis on 4G enabled handsets at competitive price points will be the order of the day. End-users’ desire to upgrade and keeping abreast with the latest technology, will continue to drive a strong growth for the smartphone market in 2015,” said Kiran Kumar, Research Manager of Client Devices at IDC India.