The Indian smartphone market, a vibrant and rapidly evolving ecosystem, has shown a steady rise in shipments during the first half of 2024. While 69 million units were shipped, marking a 7.2 percent year-over-year (YoY) growth, the second quarter (Q2) of the year witnessed a more modest 3.2 percent YoY rise with 35 million units shipped. This growth, however, comes against a backdrop of "muted consumer demand" and rising average selling prices (ASPs), factors that are hindering a complete annual recovery. This article will delve into the intricacies of the Indian smartphone market in Q2 2024, analyzing segment-wise performance, key players, and the evolving landscape of 5G adoption, all while providing a glimpse into the expected trends for the remainder of the year.
Segment-Wise Performance: A Tale of Growth and Decline
The Indian smartphone market paints a nuanced picture with distinct segments experiencing varying degrees of success. While certain segments demonstrate considerable growth, others are battling headwinds.
Entry-Level: A Segment Facing Challenges
The entry-level segment, encompassing phones priced under Rs. 8,400, faced a significant 36 percent YoY drop in shipments, capturing only 14 percent of the market share in Q2 2024, compared to 22 percent in the same quarter last year. Xiaomi held the lead in this segment, followed by Poco and Realme. The segment’s decline is attributed to a combination of factors, including the increased popularity of affordable 5G options in the mass budget segment, and the rising cost of components.
Mass Budget: A Segment of Resurgence
The mass budget segment, encompassing phones priced between Rs. 8,400 to Rs. 16,800, saw a much-needed bounce back, experiencing an 8 percent YoY growth. Xiaomi, Realme, and Vivo collectively dominated this segment, holding a commanding 60 percent market share. The availability of 5G-enabled devices at attractive prices played a crucial role in fueling this segment’s growth.
Entry-Premium: A Beacon of Growth
The entry-premium segment, which includes phones priced between Rs. 16,800 to Rs. 33,500, emerged as the star performer, showcasing a remarkable 42 percent YoY growth. Leading the charge in this segment were Oppo, Vivo, and Samsung, who together secured 60 percent of the market share. The appetite for mid-range phones offering premium features at competitive prices was a key driver of this segment’s success.
Mid-Premium: A Segment Facing Headwinds
The mid-premium segment, encompassing phones priced between Rs. 33,500 to Rs. 50,400, experienced a significant 25 percent YoY decline in Q2 2024, seeing its market share shrink from 5 percent to 4 percent. Vivo emerged as the segment leader, enjoying a 25 percent market share, trailed by OnePlus and Oppo. While high-performance phones in this segment do offer compelling features, the segment seems to be battling consumer preference for either more affordable options or premium flagship devices.
Premium: A Segment Under Pressure
The premium segment, encompassing phones priced between Rs. 50,400 to Rs. 67,100, also experienced a downturn, recording a 37 percent YoY decline in shipments. This segment’s market share fell to 2 percent from the previous year. Popular devices in this segment included the iPhone 13, Samsung Galaxy S23 FE, iPhone 12, and OnePlus 12. Despite these figures, Apple witnessed a significant 61 percent YoY increase in its market share, while Samsung saw its share grow from 21 percent in Q2 2023 to 24 percent in Q2 2024.
Super-Premium: A Segment of Continued Growth
The super-premium segment, encompassing devices priced above Rs. 67,100, continued its upward trajectory, showcasing a 22 percent YoY increase in shipments. This segment captured 7 percent of the market share in Q2 2024, compared to 6 percent in the same period last year. The iPhone 15, iPhone 15 Plus, iPhone 14, and iPhone 14 Plus together represented a whopping 77 percent of shipments, granting Apple an 83 percent market share. The Samsung Galaxy S24 and Galaxy S24 Ultra also made their mark, contributing to 11 percent of the segment’s shipments and a 16 percent market share for Samsung.
The Rise of 5G: A Driving Force in the Indian Smartphone Market
The adoption of 5G technology has been a significant force within the Indian smartphone market in Q2 2024. 5G smartphone shipments saw a dramatic increase from 49 percent in Q2 2023 to 77 percent in Q2 2024. Notably, the mass budget segment witnessed a particularly impressive surge in 5G smartphone shipments, with a 2.5x increase to 45 percent of the market share. Among the most popular budget 5G devices were Redmi 13C, Oppo F25 Pro, Realme 12x, Redmi 12, and Realme C65. This trend underscores the increasing preference for 5G-enabled devices across price segments, as consumers are drawn to the benefits of faster data speeds and improved connectivity.
The Role of Online Channels: A Growing Influence
Online channels have continued to gain traction in the Indian smartphone market. IDC reported an 8 percent YoY growth in smartphone shipments to online channels in H1 2024. This signifies the growing preference for online purchasing, driven by factors such as convenience, diverse options, competitive pricing, and the ease of accessing reviews and comparisons.
Key Players: A Competitive Landscape
The Indian smartphone market is a battleground for several key players, each vying for a dominant position. This article will highlight some of the most prominent players in the market, based on their Q2 2024 performance.
- Vivo: Vivo emerged as the market leader in Q2 2024, capturing a 16.5 percent share of the overall smartphone market, demonstrating strong performance across multiple segments, including the entry-premium and mid-premium segments.
- Xiaomi: Xiaomi, a long-standing player, maintained a strong presence, holding 13.5 percent of the market share. Its dominance in the entry-level and mass budget segments helped secure its position.
- Samsung: Samsung, a recognized brand known for its high-end devices, secured 12.9 percent of the market share. Its focus on the entry-premium, premium, and super-premium segments has contributed to its consistent performance.
Looking Ahead: H2 2024 and Beyond
The remainder of 2024 holds both challenges and opportunities for the Indian smartphone market. The entry-premium segment is expected to continue its positive trend, while the entry-level segment will likely face ongoing headwinds. The focus on affordable 5G smartphones will likely continue, further bolstering the mass budget segment. As the year progresses, we can expect to see a rise in marketing endeavors surrounding generative AI (GenAI) smartphones, with brands capitalizing on this emerging feature in their promotional efforts.
The Indian smartphone market, a dynamic and rapidly evolving ecosystem, remains a hub of technological innovation and consumer demand. With the ongoing rollout of 5G networks and the increasing adoption of innovative features, the market is poised for continued growth in the coming quarters. It will be intriguing to observe how brands navigate these trends and capture the attention of Indian consumers in the months ahead.
