India's smartphone market grew just 1% in 2023; outlook for 2024 strained: IDC

With a marginal uptick of just 1% year-over-year (YoY), India's smartphone market witnessed a total shipment of 146 million smartphones, the latest report by market intelligence firm  International Data Corporation (IDC) shows. The latter six months of the calendar year showcased an impressive 11% increase YoY, which mitigated the significant 10% decline observed in the initial half.

Shipments in Q4 of 2023 reached 37 million units, surpassing expectations due to the introduction of several new models, as reported by IDC.

Samsung's Galaxy A14 emerged as the most shipped device in 2023. In terms of brand performance, Apple had a remarkable year, shipping nine million units despite having the highest ASP. Samsung retained its leadership position, although experiencing a 5% decline in shipments YoY. Vivo (excluding iQOO) secured the second position with an 8% increase in shipments and 9% growth in ASP. OnePlus continued to dominate the mid-premium segment, constituting nearly 40% of shipments in that category.

Despite adjustments in pricing and vendor incentives, consumer demand remained subdued, resulting in excess inventory levels across distribution channels. The year also saw a notable increase in the Average Selling Price (ASP) of smartphones, with a rise of 14% YoY in 2023, marking the third consecutive year of double-digit ASP growth, which constrained market recovery. This increase in ASP was attributed to a higher proportion of premium-segment smartphones, which rose from 6% to 10% in 2023, as well as a significant uptick in 5G shipments, reaching a record 55%.

“Most brands chose to reduce prices and offer additional channel margins in the last quarter to manage the inventory levels from post festive cyclic dip. This will give a lukewarm start to 2024 with cautious stocking by the channels,” said Upasana Joshi, Research Manager, Client Devices, IDC India.

Shipments through online channels experienced a 6% decline, accounting for 49% of the overall market in 2023, down from 53% in 2022. Conversely, offline shipments grew by 8% YoY, as vendors expanded their retail presence, particularly in smaller towns and cities, offering attractive premium products.

The share of smartphones powered by MediaTek increased to 50%, growing by 6% YoY, while Qualcomm's share declined to 25%, marking a 6% decrease in shipments YoY.

“The road to recovery for smartphones in 2024 looks strained and elongated, as worries around income, inflationary stress, price increases, and inventories remain. 2023 was all about affordable 5G devices, timely price corrections, and offline channel expansion by brands, whereas 2024 and beyond requires greater efforts, especially at entry-level price points, to fuel organic growth," Navkendar Singh, AVP, Client Devices Research, IDC India said.