India smartphone market sales below 50 mn units in 1H23, second half ‘optimistic’: Techarc

Smartphone sales in India stood at 49 million units in the first half of 2023 (January-June), which is 25% lower than the usual run rate, according to the data released by Techarc on Thursday.

The research firm said the sales in 1H23 have been “in line with expectations”. “However, it was not expected that the sales of smartphones would go under 50 million for the period,” it added.

Nevertheless, Techarc remains optimistic about sales in the second half, with total sales reaching 140 million units by the end of 2023 driven by replacement cycle and affordable 5G smartphones.

“The 2H market situation will be determined by the sales of crucial months of August-October,” it said.

Market tracker Canalys separately reported that the India smartphone market stabilised in Q2 2023 after three-quarters of decline, with shipments of 36.1 million units at a modest 1% year-over-year fall but grew strongly at 18% on a sequential basis as vendors’ inventory levels improved due to a favorable business environment.

Techarc projects over 58% of the total smartphones sold in 2023 to be 5G. It added that while there will be attempts to have ‘symbolic’ sub-Rs 10,000 5G smartphones, a range of 5G smartphones starting at Rs 12,000 will help in mass adoption of 5G smartphones.

It expects the market to be led by Samsung, Vivo, and Oppo, respectively. And beyond these three, the rankings may remain volatile among other brands such as Redmi, Realme, OnePlus, Tecno, and Motorola.

The offline channel is expected to contribute 53% of the sales while online will contribute the remaining 47%.

In terms of revenue, Techarc expects 2023 to close at $42 billion, up by around 18% over the previous year.

It added that Apple continues to drive the luxe segment’s growth (> Rs 50,000) while Samsung remains the de-facto choice for users seeking to buy an Android phone in price range of over Rs 100,000.

“The macro-economic indicators are favourable than previous year which is expected to drive positive consumer sentiment in the 2nd half of the year reciprocating the festive season preparations of the smartphone brands,” said Techarc.

The research firm said that it might be a “winning strategy” for the brands to remain focused on their key market segments and avoid having a play in all the segments, especially where they find resistance from consumers. It suggested that rather than all brands trying to grab an opportunity in the premium segment and find limited success, they can work on 5G in their stronghold segment.

“The 140 million smartphone sales is an uphill task but still achievable looking at the big picture that includes the 5G opportunity in the affordability segments, macro-economic conditions and the replacement cycle potential sales. The execution of the key brands in terms of limiting their competition by narrowing operations will be a key enabler in this scale,” said Techarc.