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Indians Buy 100 Mn Smartphones in 2015

March 3rd, 2016

SmartPhone Shipments in IndiaAs per IDC, smartphone shipments in India grew 15% yoy to reach 26mn units in 4Q15, taking the total 2015 shipment count to 104mn units (+29% yoy). The yoy shipment momentum slowed in 4Q15 as sales via offline channel (which comprises the bulk of smartphone sales) were sluggish. 4G LTE enabled Smartphone volume has picked up significantly. We believe this may be due to increased vendor focus on the online sales channel (driven by online mega sales push by leading Indian e-tailers during the festive season in Oct-Nov) which saw increased competition from local / Chinese vendors alike and heavy discounts from e-commerce players.

In terms of market share, Samsung continued to lead the market with a 27% share (helped by the success of its J-series line-up), followed by Micromax (which witnessed a shipment decline of 20+% qoq). Notably, Lenovo surpassed Intex in 4Q15, taking the third spot with a 12% market share. Indian vendors ceded some ground to Chinese vendors in 4Q15 amid intensified competition (helped by growth in e-commerce channel) in an increasingly commoditized smartphone market. Of note, sales via online channel grew 2.5x yoy, comprising 35+% of total smartphone sales in 4Q15.

50% of smartphones shipped in 4Q15 were locally assembled. (Samsung led locally manufactured handset shipments followed by home-grown vendors such as Micromax). Note that India still lacks a full-fledged component ecosystem and we expect assembly of SKDs/ CKDs to be the main focus of local manufacturing over the next two to three years

Further, Indian feature phone users may also have pushed out smartphone purchase decisions in anticipation of further decline in prices, in our view. Nevertheless, India is still one of the fastest growing smartphone markets globally.

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