Smartphone shipment in the country remained almost flat at 25.8 million units in the October-December 2016 quarter compared to the year-ago period, impacted by demonetisation and seasonal slowdown after festive sales, research firm IDC said.
Compared to the July-September 2016 period, shipment in the said quarter declined sharply by 20.3 per cent.
“In CY Q42016, smartphone shipments clocked 25.8 million units, registering similar volumes as that of CY Q42015… This is mainly due to a seasonal decline after an all-time high festival quarter and demonetization in the month of November, which led to relatively lower consumer sales in November and December,” IDC said.
Online sales of smartphones was at 31.2 per cent in the fourth quarter with Xiaomi and Lenovo accounting for more than half the channel’s volume. For the full year of 2016, smartphone shipment stood at 109.1 million units, up by 5.2 per cent over the previous year.
“This is relatively lower than expected smartphone shipments for India owing to sluggish first half and demonetisation at the end of year,” IDC Senior Market Analyst, Client Devices Karthik J said. IDC expects 2017 to be a test of survival for many vendors as they struggle to survive in this extremely competitive smartphone market, possibly leading to consolidation.
“The feature phone segment is likely to contribute the majority of mobile phone shipments in 2017; the migration to smartphones is expected to further slow down due to the introduction of low-cost 4G feature phones and its continued relevance to its sizeable target consumer,” IDC Senior Research Manager, Client Devices, Navkendar Singh said.
However, replacement demand would drive most of the smartphone shipments in 2017, he added.
Feature phone to smartphone migration has slowed down as prices of smartphones are still quite high for a feature phone user, he added. “Also, ease of use, long battery life and durability of feature phones continue to be relevant for large number of users of this category,” Karthik said.