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India a bright spot for smartphone shipments in 2018 Pixabay

India provided one of the few bright spots for smartphone companies in 2018, with shipments up 10% to 137 million units, an increase of 12 million units over the previous year.

The analyst firm Canalys said in a blog post that India now accounted for more than 10% of the global smartphone market, an increase from 6% five years ago.

In the final quarter of 2018, Indian shipments grew 14% to 34.1 million units, bouncing back from a quarter which had seen a small decline.

India was among the six countries in the top 20 that recorded positive full-year growth, though in terms of percentage it stood behind Indonesia (17%), Russia (14.1%) and Italy (10%). But India was the lone country to show growth for the last three years.

Among vendors which shipped to India, Xiaomi took 30% of the market (41.0 million units) followed by Samsung (25.8%, 35.4 million units) and vivo (10.5%, 14.4 million units).

india canalys

Canalys research manager Rushabh Doshi said 2018 had been a defining year for the smartphone market in India.

"The impact of a declining Chinese market on vendors such as OPPO, vivo and Xiaomi was pronounced, with OPPO and vivo reducing both their above- and below-the-line marketing efforts significantly to counter falls in their Chinese businesses," he said.

"Xiaomi, on the other hand, focused heavily on India, with excellent results. India is now the biggest market for Xiaomi worldwide. The Chinese vendors have done well to ride the spread of 4G and the boom in local apps and services.

"[The year] 2018 was undoubtedly the year app-based economies flourished."

In the final quarter of 2018, Xiaomi shipped 9.4 million smartphones to China, and 10.0 million to India.

canalys india two

Doshi said 2019 would be more disruptive than 2018.

"Since 1 February, the Indian Government has restricted online marketplaces, such as Amazon and Flipkart, from selling devices exclusively on their platforms. It has also banned online marketplaces from having equity stakes in seller accounts," he said.

"The FDI (foreign direct investment) policies are going to slow market development spending by these platforms, thereby denting overall online smartphone sales. There will be a see-saw shift toward offline channels this year, and many vendors will start engaging with distributors or offline retailers in a bid to protect their growth ambitions."

Doshi added that while operations at Amazon and Flipkart were likely to stabilise in six months, uncertainty over future regulation would weigh heavily against these platforms.

"On the bright side, the raising of the income tax ceiling from INR2.5 lakh (Rs 250,000 or A$4935) to INR5.0 lakh (Rs 500,000 or A$9872) will imply a higher net pay, and a slightly higher disposable income. This is definitely good news for vendors looking to raise prices without sacrificing their addressable markets," he said.

Graphics: courtesy Canalys

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the sitecame into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

 

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