India’s ultra premium smartphone market witnessing intensified competition; 60-80% growth likely driven by Apple

Source: Economic Times, 03 October 2021

NEW DELHI: The ultra-premium smartphone segment is witnessing intensified competition with established players Apple, Samsung and OnePlus vying with new entrants like Vivo for a greater share of consumer wallets in the festive season.

The over $700 segment is expected to surge 60-80% on-year in 2021 on pent-up demand, market trackers said, as consumers who did not upgrade their smartphone in 2020 due to the Covid-19 pandemic que up to buy expensive devices.

“The significant growth in these segments can be attributed to increased consumer spending on luxury/costly product segments, re-allocating spends from holidays, shopping, travel, dine out etc,” Navkendar Singh, research director at market insights firm IDC, told ET. “We expect this momentum to only grow further in the upcoming festive season, driven by upgraders within premium and from the $500-$700 segment.”

Counterpoint Research has forecast that Apple, Samsung, OnePlus, and Vivo will drive the ultra-premium market, which is expected to witness more than 60% on-year growth in 2021.

“Competition will be very high in this segment, with Apple likely to corner the lion’s share of around 40% in Q3. We have seen high shipments of iPhone 11 and 12 in August, and it will continue coupled with the iPhone 13 series,” Prachir Singh, senior research analyst at Counterpoint, said. “Apple is filling channels.”

IDC data for the April-June period showed that the $700-$1,000 segment grew 80% compared to 2019, while the $1,000 segment surged over 200%, with 2020 being a washout year owing to the pandemic.

Handset brandsQ2 2021
Apple49%
OnePlus32%
Samsung9%
Vivo4%
Others5%
Ultra-premium segment: $700 and above  Source: Counterpoint Research                                                 

“Almost 97% of the India market is under $500. However, there is a strong uptake in the $700-$1,000 price segment over the past few quarters,” Singh said.

The $700+ segment has gone up from 1% share in 2019 to 2.3% in 2021, he added.

Due to supply constraints impacting the entire mobile phone ecosystem, premium players have tried to push in adequate stocks, including of older models, ahead of the festive season, market trackers said. They are also offering upfront discounts and cashbacks besides financing schemes and trade-in programs to attract buyers. The premium segment – over Rs 30,000 – contributes 7% by volumes, but 23% by value in the overall smartphones space.

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