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Indian Smartphone Market Bound for Hard Landing by Q2, FY18 - Fittest will Survive

Indian Smartphone market is in full swing with higher adoptions. Most of the companies operating in the segment are flooded with opportunity to sell more Smartphone. Smartphone players must thank Reliance Jio for their service launch and acquisition of 16 million user in the first 30 days of service launch. Based on the Counterpoint market research data, India Q3, FY 17 reached 35 million. We should also expect that IDC and CMR will come out with similar number. As per E2E Infotel Analysis, Indian Q4, FY17 will be 33 Million.

The positive feel good factor within Indian consumer also indicate very good festival sale in offline and online mode. It is interesting that how most of the Smartphone companies are spending lavishly in advertisement as well as in developing their own manufacturing hub to ensure that they don't miss the opportunity due to component or inventory shortage.

It is overwhelming that Indian Smartphone Segment started showing promise after few quarter of lull but Smartphone player must be very careful given the total addressable market size of Smartphone in India.

As per E2E Infotel Analysis projection, Indian Smartphone Shipment during FY17 will reach 110 million. In the last 2 years, Smartphone shipment reached total number of around 160 Mn excluding the Smartphone being sold through the grey market.

Given the certain limitation in Indian geographies such as poverty ( <20% of total population), illiterate population (<30% of total population) land us to total addressable market of around 550 Mn userbase. Based on the current Mobile Internet userbase of around 325 mn , only 60% of the them uses internet regularly.

It is expected that Indian Smartphone Segment saturation will hit India by Q2, FY18 wherein we will observe steep decline in Smartphone segment. That will lead many Smartphone players assembly line idle & will lead the sector in similar situation the way China faced it Q2, FY16.

We all know that most of the Chinese players are spending lavishly and are not profitable but at the same time, Chinese Smartphone players are deep pocketed and can sustain the downturn. The expected hard landing in Smartphone segment may lead to closure of many Small players whereas many other will consolidate their positioning.

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About Devendra Prasad

20 years plus industry veteran of domestic and international ICT domain with the expertise in Business, Technology, Strategy and Analysis. Specializes in forecasting impact analysis, trends and recommendations for Investments, Technology and Regulations.
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