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Explosive Smartphone Growth, Cannibalises Indian Feature Phone Sales

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The India smartphone market grew by 229% year over year (YoY) in the third quarter of 2013 (3Q13). According to IDC, vendors shipped a total of 12.8 million smartphones in 3Q13 compared to 3.8 million units in the same period of 2012. 3Q13 grew by close to 28% over the units shipped in the second quarter of 2013 (2Q13).

The 5-6.99 inch screen size smartphones (phablets) continued to show sustained growth in 3Q2013 as well - the phablet category contributed to 23% in the overall market in terms of volume.

The overall mobile phone market (Feature Phones and Smartphones) had a 12% growth YoY and a 7% growth quarter over quarter (QoQ) with the share of feature phones sliding further to make 81% of the total market in 3Q13 despite the feature phone market growing at 3% in 3Q2013 over 2Q2013.

­The third quarter of 2013 witnessed a slowdown in the numbers for top local vendors such as Micromax and Karbonn - while international vendors like Samsung and Nokia powered by their new product launches made up for close to 30% of the overall market in 3Q2013.

"The growth in the smartphone market continues to drive the overall growth numbers for the phone market - given that there's still a huge potential for smartphone penetration in India, this trend is expected to continue in the coming quarters", said Manasi Yadav, Senior Market Analyst with IDC India.

"The change agents for this rapid shift of consumer preference towards Smartphones have been the narrowing price gap between Feature phones and Smartphones. The Smartphone market is expected to maintain these elevated levels of growth in the near future" comments Kiran Kumar, Research Manager with IDC India.

Top Five Smartphone Vendor Highlights

Samsung maintained its leadership spot with about 33% in terms of market share. Its smartphone shipments grew by close to 36% from 2Q 2013 to 3Q2013. The third quarter saw quite a few new launches across price points by Samsung - however the low-mid tier phones such as Galaxy S Duos and Galaxy Star continued to drive their volumes.

Micromax held on to its second spot with about 17% in terms of market share in 3Q2013. Some of the top selling models were A27 and A26 in terms of volumes - we have seen a dedicated marketing and advertising push from the brand with continued investments to up the brand recall. These efforts are expected to bear fruit in the coming quarters in time for their upcoming launches.

Karbonn: The market share for Karbonn in 3Q2013 was close to 11%, some of the top selling models for this brand were A6 and A50. There has been a significant pick-up for the Titanium range of phones especially S5 and S2 specifically.

Nokia: The Lumia range of devices continued to show a growth trajectory in 3Q2013 and garnered close to 5% market share - the trend is expected to continue with greater support from Microsoft in the coming quarters. The third quarter of 2013 saw a few notable launches like the Lumia 625 and Lumia 925 which have been able to generate positive interest from consumers and developers alike.

Lava : Lava made it to the top 5 for the first time in 3Q2013 owing to huge shipments coming in from its XOLO and IRIS range of competitively priced devices. Some of the top selling models for the brand are IRIS 349 and IRIS 402. Keeping in mind the shifting consumer preferences, there has been a conscious shift from feature phones to smartphones, which is expected to continue in the upcoming quarters too.

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Tags: India