India has huge potential to become the second-largest smartphone market in the world. While smartphone penetration is still limited in India at the current stage, there is an enormous opportunity in the country as its 1.31 billion population is only less than that of China. In 2014, smartphones accounted for only 16.6% of the total mobile phone shipments in India. By this year, the share has expanded to about 25%, amounting to 71 million units shipped annually according to estimates by global market research firm TrendForce. TrendForce further projects that the annual smartphone shipments in India will exceed 150 million units in 2017, representing around 48% of the country’s total mobile phone shipments for that year. In sum, the growth of the smartphone market there is expected to multiply.
Dr. Yvonne Miao, ICT analyst at TrendForce, said that the Indian smartphone market will be able to maintain a compound annual growth rate of 35.9% for the next two years even as the global smartphone market is heading towards saturation. The market size in 2017 will be at least twice as large compared with that of 2015.
Smartphones will be Indian consumers’ first choice as mobile Internet usage continues to rise
Currently, there are over 940 million mobile phone users in India. Most of them are still primarily relying on 2G technology and use their devices mainly for making calls. However, the country’s mobile Internet usage rate continues to climb each year. The Indian government is strengthening its 3G/4G infrastructure building efforts as a result. TrendForce projects that there will be around 250 million 3G users in India by the end of 2015. The number of Indian 3G users will grow further to 330 million in 2017, when they are also expected to represent over 35% of all mobile communication users in their country.
Miao also noted that the construction of network infrastructure across India is progressing slowly. Local consumers tend to choose smartphones as their first device for accessing the Internet because of acceptable prices and portability. In a 2G area where there is no Internet connection, smartphone users can still make calls. For Indian consumers who are first-time mobile phone buyers and have never bought another type of Internet-capable device, smartphones present a reasonably priced solution. For those having just feature phones and need to buy another piece of equipment to use the Internet, upgrading to smartphones is also a very desirable choice.