In 2020, smartphone sales will bounce back to positive growth, while in India, the mid-price smartphones (Rs 14,000 to Rs 25,000) will drive the demand, according to a predictions report by research firm Gartner. Globally the sales are predicted to bounce back due to the launch of more 5G phones, though in India these are not expected to have any impact given the network will not be rolling out this year.
Mid-price to drive demand in India
“We expect that mid-price band which is between Rs 14,000 and Rs 25,000 should grow at a much faster pace than other segments. However, the overall growth is not going to be huge. It will be in single digits for the India market,” Anshul Gupta, Senior Director Analyst at Gartner India told indianexpress.com in a telephone conversation.
The reason for the growth of this segment is that there is more replacement happening into the higher mid-price with users upgrading their Rs 7,000 to Rs 9,000 phone to a Rs 15,000 or higher phone.
Gupta also noted that the shift from feature to smartphone is not happening at the same pace as was seen in the past. “The reason for this is the big price gap for remaining feature phone users to move to a good smartphone. Now users are mature and understand what they expect in their smartphone. User know what is a good UI or a quality smartphone and aspire to own a better smartphone. Some feature phone users are also opting for smartphone-like feature phones based on KaiOS. So there are longer replacement cycles all over leading to much slower growth than seen in past,” he added.
According to the Gartner analyst, the smartphone user is also more mature in India and not everyone is rushing to buy the cheapest phone available. “They understand what is a good phone and a what is a bad phone. People are more accustomed to using apps and services, and they know what is a good interface, what is good quality. People want to buy a better phone, but they don’t just want any phone,” he explained.
While India’s smartphone will see growth across price segments, there is a stronger pull for phones in the mid-price bracket. “It is not only phone users coming from lower price bands, but also the technology is really packed at this price point. Phones at Rs 15,000 and Rs 20,000 price bracket are now packed with features and the latest features, so people don’t often find reason to get a Rs 30,000 phone,” he added.
Global predictions and 5G impact
According to data shared by the company, the worldwide smartphone market will grow at 3 per cent in 2020 and markets like Middle East and North Africa, Mature Asia/Pacific and Greater China will see 5 per cent growth overall.
For the global market, the growth is an improvement over 2019, which saw worldwide smartphone sales decline 2 per cent, the first time since 2008. The global bounce back will likely be due to the rise of 5G phones in these mature markets with Gartner predicting sales of 5G devices to hit 221 million in the year, or roughly 12 per cent of the overall market.
“2019 was a challenging year for smartphone vendors, primarily due to oversupply in the high-end sector in mature markets and longer replacement cycles overall. However, in 2020, the market is expected to rebound with the introduction of 5G network coverage in more countries and as users who may have delayed their smartphone purchases until 2020 in expectation of price reductions begin buying again, ” Annette Zimmermann, research vice president at Gartner said.
The Middle East and North Africa, mature Asia/Pacific and Greater China (China, Taiwan and Hong Kong) will exhibit the highest growth rates in 2020 at 5.9 per cent, 5.7 per cent and 5.1 per cent respectively, according to Gartner data.
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