According to our latest research from Market Monitor service for Q3 2014 (Jul-Sep), there were significant changes in the competitive landscape in the second largest mobile phone and third largest smartphone market on the planet.

Some key findings below:

Market Leaders:

• Indian smartphone market grew a healthy 64% annually with growing traction from domestic and Chinese OEMs
• However, Samsung continues to dominate the India smartphone segment with 25% market share followed by Micromax and Karbonn with 20% and 10% market share respectively
• In the overall mobile phone market (smartphones + feature phones), it’s a very close race between Samsung and Micromax for the top spot, as Samsung regained the lead from Micromax this quarter after the Indian vendor surpassed the Korean giant in Q2.
• Motorola remained the fourth largest smartphone vendor but close race next quarter for the third/fourth spots between Motorola-Lenovo, Karbonn, Sony, Lava-Xolo and Xiaomi.

Source: Market Monitor Q3 2014 Report

 The growing need for consumers flocking to the internet using mobile phones coupled with rapidly declining average selling price (ASP) of smartphones has been the key drivers of uptake of smartphones in India. The declining smartphone ASPs is as a result of proliferation of firstly not only local brands entering a price-war but also the highly price-competitive Chinese brands such as Xiaomi or Lenovo entering the Indian market. These brands are employing cost-effective distribution strategies such as online e-commerce channels to keep the costs fairly low in order to gain price competitiveness which is a boon to consumers

India smartphone market still has a room for vendors to grow exponentially as it expands deeper beyond urban India. However going forward only the vendors need to find faster and innovative ways to reach out to the end consumer. We estimate that going forward three out of four smartphones in the country will be 3G smartphones. The 6,000 to 8,000 INR price band is driving this trend and contributed to almost 30% of the total smartphone sales in Q3 2014. Samsung led this price band during the quarter but the share is being chipped away by Micromax, Lava and the new entrants such as Motorola and Xiaomi

Million Smartphone Club

The quarter was marked with major milestones crossed by number of OEMs charting their growth story in this high-growth important market. These brands are now shipping more than a million smartphones per quarter joining the likes of Samsung, Micromax and Karbonn.

• Fresh from its acquisition by Lenovo, Motorola shipped more than 1 Million smartphones for the first time in India in a single quarter (3Q 2014). Motorola’s leaner go-to-market strategy coupled with exciting portfolio of Moto X/G/E phones at competitive price points is being received very well by urban consumers
• Sony also crossed 1 Million mark unit shipments for its Xperia smartphones in India for first time in a single quarter (3Q 2014). Xperia C, Xperia M dual and the Xperia Ultra T2 registered healthy demand during the three months of Q3’14 as per our Model Sales Tracker service
• The Indian handset brand LAVA (excluding Xolo) also joined the million smartphone club shipping 1 Million units of its Iris sub-branded smartphones for the first time in India in a single quarter (3Q 2014). Lava saw strong momentum for its budget models such as Lava Iris X1 and X5 during the quarter
• We predict the next brands in line to join the ‘million smartphone club’ will be Xiaomi, Xolo, Gionee and Intex, to ship smartphones at a million per quarter run rate

Another significant milestone reached during the quarter was by Apple. The Cupertino vendor crossed 1 million units of cumulative iPhone shipments for the first time in its fiscal year ever (Oct'13-Sept'14) for India market. This is a notable feat for Apple as it captured almost half of the high profit premium segment, taking share away from Samsung.   

Big Debuts

Xiaomi

As highlighted above, we saw one of the world’s fastest growing brand Xiaomi debuting in India in Q3 2014 aiming to replicate its hyper-growth model in bigger markets similar to that in its home market. Xiaomi will join the trend of undercutting bigger rivals such as Samsung with a high value-for-money offering similar to what Motorola, Micromax and ASUS have been offering over the previous quarters. With just two months of sales, Xiaomi raced to capture 1.5% share of the Indian smartphone market and on track to double their market share sequentially according to our Market Outlook service.

Android One

Google launched its Android one program globally with India being the first market partnering with Micromax, Karbonn and Spice for the first generation Android One devices. The initial uptake has been modest but could pick up with broader physical retail distribution reach, another lower pricing and more partners. Counterpoint estimates the cumulative Android One shipments to hit a million mark by the end of the year but will face tough competition from likes of Xiaomi and long tail mobile phone brands offering the same specs even at lower price points

Mozilla Firefox

Also, during the quarter Mozilla partnered with couple of Indian smartphone brands Intex and Spice to launch the cheapest smartphone in the market (sub US$30 retail) running its Firefox OS. While the initial uptake and distribution reach has been modest but it will be interesting to see how Mozilla will expand partnerships, distributions and promotions to tap into the huge hundreds of millions of Indian feature phone users.

The comprehensive and in-depth Q3 2014 Market Monitor is available for subscribing clients. Please feel free to reach out to us at [email protected] for further questions regarding our in-depth latest research, insights or press enquiries.

Market Monitor research is based on sell-in (shipments) estimates based on vendor’s IR results, vendor polling triangulated with sell-through (sales), supply chain checks and secondary research.