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India now second largest smartphone market ahead of US; Xiaomi nips on Samsung’s heels for top spot

As smartphone shipments grew 23 per cent year on year in Q3 2017 to reach just over 40 million units, India overtook the United States and moved to second position behind China.

By: Tech Desk | New Delhi |
Updated: October 27, 2017 3:48:30 pm
Smartphones, smarphones India, xiaomi, Xiaomi phones, Samsung, anroid phones, xiaomi Samsung, smartphone markets, smartphone market in India, Vivo, Oppo and Lenovo, technology news Canalys report on Indian smartphone market: Interestingly, the top five vendors (Samsung, Xiaomi, Vivo, Oppo and Lenovo) now accounting for 75 per cent of total shipments. (Representational photo)

India is now the second largest smartphone market after China thanks to a spirited recovery in shipments in the third quarter of 2017, research firm Canalys reported. As shipments grew 23 per cent year on year in Q3 2017 to reach just over 40 million units, India overtook the United States and moved to second position behind China.

With Xiaomi closing in on Samsung —the Chinese startup shipped 9.2 millions units compared to the Korean giant’s 9.4 million units — the two accounted for almost half of the total market where the top five vendors continued to post strong growth in Q3 2017.

“This growth comes as a relief to the smartphone industry. Doubts about India’s market potential are clearly dispelled by this result,” said Canalys Research Analyst Ishan Dutt. “There are close to 100 mobile device brands sold in India, with more vendors arriving every quarter. In addition, India has one of the most complex channel landscapes, but with low barriers to entry. Growth will continue. Low smartphone penetration and the explosion of LTE are the main drivers.”

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Interestingly, the top five vendors (Samsung, Xiaomi, Vivo, Oppo and Lenovo) now accounting for 75 per cent of total shipments. While Samsung recorded a 30 per cent growth, Xiaomi increased shipments by a staggering 290 per cent.

“Xiaomi’s growth is a clear example of how a successful online brand can effectively enter the offline market while maintaining low overheads,” said Canalys Analyst Rushabh Doshi. “But Xiaomi focuses on the low end. It struggles in the mid-range (devices priced between INR15,000 and INR20,000), where Samsung, Oppo and Vivo are particularly strong. Nevertheless, we predict Xiaomi’s continued go-to-market innovations will allow it to overtake Samsung within a couple of quarters.”

Apple meanwhile doubled its shipments to 900,000 units in Q3 even as it started local production of its smartphones.

Doshi said the Indian economy is proving very strong in the second half of 2017, now that the “twin shocks of GST and demonetisation” are behind it. “Reduced indirect taxes have added new equity to the market, with distributors and retailers able to serve areas beyond their home regions as inter-state operations become easier. As the infrastructure matures, consolidation in distribution is inevitable.”

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