Smartphone and Smart-Featurephone categories to drive the growth, while Featurephones to witness decline.  Sales to grow at 3.4% in 2019.

For the first time ever, India will sell more than 300 million mobile handsets in 2019.  This would be backed by growth in Smartphone as well as Smart-Featurephone categories.  Featurephones will continue to exhibit declining trend.

Market Outlook

As many as 302 million mobile handset are estimated to be sold in 2019, of which 149 million (49.3%) will be Smartphones, 55 million (18.2%) will be Smart-Featurephones and the remaining 98 million (32.5%) will be the Featurephones.  Incidentally, this will be the first time when Featurephone sales will be in 2-digit numbers.

Commenting more on the outlook, Faisal Kawoosa, Founder & Principal Analyst, techARC said, “There is a large replacement cycle due in 2019, for users who bought their first 4G Smartphone between 2015-2017.  This is going to bring back the double digit growth for the segment in 2019.”

“In India, the replacement cycles vary from region to region.  While people in South and West replace their Smartphones even in less than a year’s time, the users in the Eastern parts of the country, tend to hold Smartphones for 4-5 years.  North Indian users are somewhere in-between the two,” Faisal added.  

The outlook for new Smartphone market does not seem to change than the 2018, and there is little movement expected in Featurephone to Smartphone upgrade.

Brand Outlook

In 2019, six (6) of the prominent brands are expected to witness growth in their sales compared to 2018.  These include Xiaomi, OnePlus, Google, Nokia, Asus and Realme.  The growth is expected as a result of their continued strong hold of the segment(s) they operate as well as rejig of products, pricing, promotion as well as place (channel) strategies that many of these worked on during 2018.

Unfortunately, none of the home grown brands is expected to show reversal of declining trends that continued all through 2018.  For the incumbent Samsung and some of the strong challenger brands including Oppo, Vivo and Honor-Huawei, they are expected to remain flat and continue to show similar market performance as in 2018.

• Xiaomi expected to continue the lead in 2019 in the overall Smartphone market.
• Samsung and Nokia to have close competition in the Featurephone segment.
• OnePlus to continue lead its premium segment.
• Google expected to reduce the gap with Samsung in luxe Android Smartphones.

Technology Outlook

From the global market outlook, 5G and Foldable Smartphones are going to be the two key attractions of the industry.  However, 2019, may not be the year for India to witness these two coming.

Sharing more on the technology outlook, Amit Sehgal, Principal Consultant, techARC said, “India would witness more of specifications and features percolating from the premium to lower segments of Smartphone market as well as AI and other software driven optimisations being introduced in 2019.”

“As regards 5G Smartphone, it is unlikely to be launched in India in 2019,” Amit further added.

Some of the key technology trends for the industry in 2019 identified include:-

• In-display front (selfie) camera to be one of the main attractions of premium Smartphones to be launched in India.  This will lead to Notch-free Smartphones in the premium and luxe categories.
• In-display fingerprint sensor to be seen in mid range launches of Smartphones during the year.
• Some limited launches in the mid range will also bring in fast charging function to the segment.
• AI to be implemented beyond camera and battery.  AI is expected to play a significant role in the content consumption over Smartphones in 2019.  This could come through OEMs or the partners in the eco-system.
• After the success of Gaming in the premium and luxe Smartphone segment, 2019, could see it coming to the mid range of Smartphones.
• It is expected that 4GB RAM – 64GB ROM combination will be the preferred variant in 2019.
• eSIMs are also expected to be introduced in 2019.  These will be dual-SIM Smartphones with one being the nano and the other an eSIM.

Segment Outlook

Entry level Smartphones: This segment will substantially squeeze in 2019. There will be many brands who will divest their portfolios from the segment.  This means Smartphone market will again have a threshold in the range of Rs 5,000-5,500 giving serious players a chance to introduce durable Smartphones for the first time users, though at an extra cost than the present benchmark.

Sub 10,000: This segment will also see declining growth as most of the market opportunity would lie across the segment.  This is because the sales of 2019, would be primarily led by the upgrade/replacement market.

Mid range Smartphones: This segment, Rs 10,000 to 25,000 would see a lot of opportunity in the market.  Around, 50% of the sales will fall in this segment feeding the people who will replace their first 4G Smartphone.  The brands catering this segment will have to work on delighting the experience of 2nd time 4G Smartphone buyers.

Premium Smartphones: This is among the favourite segments of Indian Smartphone users where they get all the premium experience at half the cost of some of the flagship Smartphones of Tier 1 global brands.  In 2018, we saw a number of brands attempting to enter this segment, which is presently primarily served by OnePlus.  It will be a tough challenge for these new comers in the segment to mark an entry as there are strong user preferences for the market leader in the segment.  This segment has a lot of opportunity to get old iPhoners replace their Smartphones.  As iPhones cross 6 digit price tag in India, the addressable market continues to squeeze and the existing iPhone users prefer to switch to premium segment of Smartphones. 

Luxe Smartphones: This segment has been so far divided into Samsung for Android and Apple for iOS.  For the first time, it is expected to have a third serious player in the segment in the form of Google.  The luxe segment users who wanted to stay with Android had little choice and would eventually go with Samsung for its brand value and trust factor.  Now, with Google after its Pixel 3 launch, the market is expected to accept it as another evaluation brand in the category.  

NOTES:

• The sales estimates are based on internal techARC projections, validated through interactions across the value chain including users, channel, OEMs and Component suppliers.
• The outlook is compared to the market performance of 2018.
• The numbers projected are estimations of actual sales and do not represent shipment or sell-in numbers.

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