A report by GfK mentions low penetration of smartphone and increased competition among smartphone vendors behind the prediction.
The latest report from GfK, a German market research company, says that India would be the largest contributor of absolute smartphone growth globally this year. Kevin Walsh, director of trends and forecasting at GfK, has commented that the main reason behind this is the low penetration of smartphones in India along with the increased intensity in the competition among smartphone vendors. The increased competition will also lead to reduction in the average sales price (ASP) which will further lead to increase in number of affordable smartphones.
Talking about competition, the GfK report adds that India has seen a growth of 40% on year-on-year basis. Interestingly in this quarter, three of the top five smartphone spots amongst vendors are taken by local brands. Apart from international and local brands, the entry of Chinese smartphone brands into the Indian market has further intensified the competition. As you would expect, the intense competition is resulting in a price war that is leading to reduction in ASPs. The report says that 80% of sales have come from the low-end segment and in Q2 2015, the ASP in India has declined by 12% year-on-year. GfK has also made a prediction that smartphone prices will fall by 11% year-on-year while 4G unit demand to be more than triple.
Interestingly, if we talk about the numbers published in IDC report last week, then out of overall sales in the latest quarter, India sold about 50% of sub-$100 (below Rs. 6,000) smartphones. You can see that there is a really good demand for affordable smartphones in India.
Apart from this, report said that with major operators launching 4G services in India at the start of this month, 4G has reached all the key countries around the globe. The global 4G unit share has doubled to 58% in Q2 2015 as compared to 26% in Q2 2014.
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