With essentially no growth in the Indian smartphone market, we note that expectations for smartphone shipments this year are quite a bit more aggressive. Last year COVID-19 and border tension with China caused overall smartphone shipments on the sub-continent to see a 2nd year of ~150m units shipped, after a devastating 1H that saw shipments fall ~22.9% y/y. While we don’t have full 4Q data yet, indications are that shipments were ~50m units, flat with 3Q. What stands out is that expectations for 2021 are averaging 172.25m units, which would imply 15.2% shipment growth, a record year for India’s smartphone shipments.
It seems the theory behind the aggressive numbers for this year is the conversion of India’s large feature phone devices to smartphones with a number of local brands offering very low-priced 4G/5G smartphones to attract converters. As of the end of last year there were still ~300m feature phone users in India that are the target market for such low-priced devices, and this group is still expected to be the larger than those upgrading from an existing smartphone to a newer models. 5G in India is expected to be more commonly available in 2H 2021 at the earliest, although there is a vast difference of opinion among carriers as to when the service will become viable.
As it is early in the year, aggressive estimates would be the norm, despite overhanging issues such as those mentioned above, so we expect such estimates to change rather quickly if 1Q finds a bit more weakness than expected, but we would expect some growth in 2021 based on more carefully priced smartphone offerings from both major brands and locals. Convincing those with feature phones to move up to 5G, without 5G being widely available might prove to be a more difficult task, and convincing those 2G/feature phone customers to upgrade to 4G might also prove difficult if they become convinced that 5G will become available in 2022.The Indian market seems far less oriented toward technology upgrades than the US or China, so we are a bit skeptical about such aggressive estimates for 2021.
It seems the theory behind the aggressive numbers for this year is the conversion of India’s large feature phone devices to smartphones with a number of local brands offering very low-priced 4G/5G smartphones to attract converters. As of the end of last year there were still ~300m feature phone users in India that are the target market for such low-priced devices, and this group is still expected to be the larger than those upgrading from an existing smartphone to a newer models. 5G in India is expected to be more commonly available in 2H 2021 at the earliest, although there is a vast difference of opinion among carriers as to when the service will become viable.
As it is early in the year, aggressive estimates would be the norm, despite overhanging issues such as those mentioned above, so we expect such estimates to change rather quickly if 1Q finds a bit more weakness than expected, but we would expect some growth in 2021 based on more carefully priced smartphone offerings from both major brands and locals. Convincing those with feature phones to move up to 5G, without 5G being widely available might prove to be a more difficult task, and convincing those 2G/feature phone customers to upgrade to 4G might also prove difficult if they become convinced that 5G will become available in 2022.The Indian market seems far less oriented toward technology upgrades than the US or China, so we are a bit skeptical about such aggressive estimates for 2021.
RSS Feed