India’s smartphone market set to cross Rs 2-trillion mark in 2021

Source: Business Standard, Feb 23, 2021

New Delhi: Buoyed by renewed surge in the demand for smartphones and rising device costs may push the local smartphone market beyond the record Rs 2-trillion mark in 2021.

While disruptions from the Covid-19 pandemic led to the market size shrinking for the first time last year, in 2021, the market is expected to touch unprecedented levels — both in terms of volume and value.

In 2020, the local market recorded a fall in the number of units shipped, as shortage in supply of components and the lockdown brought the market to its knees during the first half of the year.

“Stay-at-home mandates, remote learning, travel restrictions, and manufacturing shutdowns led to a sluggish first half (shipments declined 26 per cent year-on-year, or YoY),” observed the International Data Corporation (IDC).

IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets.

Total shipments recorded its first fall — declining 2 per cent to 150 million units, from 153 million in 2019.

However, it is the fall in the average selling price (ASP) of handsets that impacted the market size more than the fall in volume numbers.

According to estimates, the ASP for smartphones last year came down 5 per cent YoY to Rs 11,200. Since their introduction in the market in 2010, ASP for smartphones before 2020 have never recorded a fall in the Indian market.

Resultantly, in 2020, the total market size shrank to Rs 1.68 trillion, from Rs 1.77 trillion in 2019.

According to experts, a poor economic outlook played a key role in this decline.

“Mass-market consumers were less inclined towards upgrading their handsets. Most of the volumes were driven by purchases that were absolutely imperative,” said Navkendar Singh, research director at IDC.

Salary cuts, job losses, and subdued consumer sentiment — a large section of consumers opted for cheaper options that were just enough to serve the purpose. It was a major paradigm shift from the earlier trend where mass-market consumers were driving ASP up, even as they were willing to spend more on smartphones as a lifestyle barometer.

In 2021, however, with a significant jump in ASP and higher volumes, the market is estimated to touch Rs 2 trillion. From its previous high of Rs 11,600 in 2019, the ASP for smartphones is now estimated to breach Rs 12,300.

A clutch of factors is set to push the market up. Since the economy snapped out of the lockdown mode, sales have grown by leaps and bounds. According to analysts, prevailing travel restrictions have rendered an urgent need for devices supporting activities such as entertainment, work from home, and remote learning, resulting in a demand for more devices per household.

While in the September quarter, the shipments grew 17 per cent YoY, in December, it recorded a whopping 21 per cent rise — setting new records for both quarters.

IDC now estimates that in 2021, the smartphone market will grow in high single digits, taking the total shipment beyond the 160-million mark.

Unlike last year, when need-based cheaper options had led the market, this time around it will be “driven majorly by upgrading consumers”, said IDC. This, coupled with the rise in 5G devices across the price range, is expected to boost the average price of smartphones.

Despite uncertainty around the launch of 5G services, the shipment of 5G-enabled smartphones crossed 3 million in 2020.

According to Madhav Sheth, vice-president, Realme and chief executive officer, Realme India & Europe, “The handset market will witness a strong supply ecosystem for 5G-ready smartphones in 2021.” The firm is planning to launch 5G devices in the affordable segment.

Nipun Marya, director-brand strategy, Vivo India, said the company will launch 5G devices “across categories at various price points”.

In recent quarters, Chinese device manufacturers have driven the 5G market by rolling out aggressively-priced devices. Flagship launches by market leader Xiaomi at under Rs 20,000 have already brought the war on the doorstep of the affordable segment. “As more 5G devices enter 2021, the ASP for smartphones is expected to rise. We expect vendors to launch 5G devices at multiple price points, backed by aggressive promotions,” said Upasana Joshi, associate research manager, IDC India.

Govt approves over Rs 12000 cr manufacturing push for telecom equipment

Source: Business Standard, Feb 17, 2021

New Delhi: The government on Wednesday approved a 12,195 crore production-linked incentive (PLI) scheme for telecom gear manufacturing in India, a move that will position the nation as a global powerhouse for production of such equipment ahead of 5G roll-outs.

The PLI scheme for telecom gear manufacturing, will be operational from April 1, 2021.

It will lead to incremental production of around Rs 2.4 lakh crores with exports of around Rs 2 lakh crores over five years. The scheme is expected to bring investment of over Rs 3,000 crore and generate huge direct and indirect employment and taxes both, an official release said.

Briefing reporters after a meeting of the Cabinet, Communications Minister Ravi Shankar Prasad said that the government is positioning India as a global powerhouse for manufacturing, and has created a conducive environment for ease of doing business.

“Cabinet has approved PLI for telecom sector…to ensure further progress of Make-in-India in telecom equipment space…5G equipment will also come…so it was important to give incentives. We held widespread consultation with stakeholders,” Prasad said adding that the scheme also aims to promote MSMEs in “Aatmanirbhar Bharat’.

The scheme is expected to offset huge imports of telecom equipment worth more than Rs 50,000 crores and reinforce it with Made in India products both for domestic markets and exports, the release said.

The new scheme has an outlay of Rs 12,195 crores over five years, and its eligibility will be subject to achievement of a minimum threshold of cumulative incremental investment and incremental sales of manufactured goods.

The incentive structure ranges between 4 and 7 per cent for different categories and years.

Financial Year 2019-20 will be treated as the base year for computation of cumulative incremental sales of manufactured goods net of taxes, the release added.

Minimum investment threshold for MSMEs has been kept at Rs 10 crores and for others at Rs 100 crores.

“Once qualified, the investor will be incentivized up to 20 times of minimum investment threshold enabling them to utilize their unused capacity,” the release said. Prasad said that government will soon come up with PLI scheme to encourage production of laptops and tablet PCs.

India smartphone market declines 1.7% in CY2020 after years of growth: IDC

Source: Business Standard, Feb 15, 2021

Mumbai: Stay-at-home mandates, remote work, remote education, travel restrictions, and manufacturing shutdowns impacted the India smartphone market, which exited CY2020 at 150 million units, down 1.7 per cent year-on-year, said the report by International Data Corporation’s (IDC).

The first half of the year (H1-2020) was marked by sluggish growth with demand down 26 per cent YoY, the second half saw recovery. H2-2020 recovered with 19 per cent YoY growth. Lockdowns and restrictions rendered an urgent need for devices supporting activities such as entertainment, work from home, and remote learning, resulting in more devices per household, and leading to a resurgence in demand for consumer devices including smartphones, consumer notebooks, and tablets in 2020, said the IDC report.

The fourth quarter of CY2020 (October-December) posted record fourth-quarter smartphone shipments of 45 million devices, with 21 per cent YoY growth. While smartphone shipments for the full year 2020 remained below the pre-pandemic level, IDC believes a stronger market acceleration in 2021 will be led by upgrades.

“The rebound of the smartphone market in the latter half of 2020 underscores the importance of devices in our day-to-day lives. In 2021, IDC expects the smartphone market to grow in high single-digit YoY, driven majorly by upgrading consumers, in the mid-range segment and affordable 5G offerings (at about $250). Also, revamped offline channel play is anticipated, to bring back growth in the very important brick and mortar counters for long-term sustainability,” said Navkendar Singh, Research Director, Client Devices & IPDS, IDC India in a statement.

In terms of handset vendors, Xiaomi’s performance in 2020 was led by its affordable Redmi 8 series, gradually replaced by the Redmi 9 series in H2-2020. Though it continued to face supply shortages through H2-2020, resulting in an annual decline, Xiaomi maintained its leadership in 2020. POCO, Xiaomi’s sub-brand, entered the “top 5 online channel vendor list”, strengthening Xiaomi’s online position at 39 per cent share in 2020.

Samsung remained in its second spot in the 2020 ranking, with its online-heavy portfolio driven by the Galaxy M series and the newly launched F series. Online channel registered strong 65 per cent YoY growth, while the offline channel shipments declined by 28 per cent, thus leading to an overall drop of 4 per cent in 2020.

Vivo stood at the third position, with strong growth in the offline channel, dethroning Samsung for the leadership position in the offline channel with 30 per cent share, driven by the affordable Y series and dedicated efforts in marketing and promotional activities in offline channels, said IDC.

Realme surpassed OPPO for the fourth slot with 19 million annual shipments, growing by 19 per cent YoY in 2020. It continued to be the second-largest online vendor, with its affordable C-series as a major driver.

Apple, at the seventh slot, exited 2020 with YoY growth of 93 per cent, driven by previous generation products like the iPhone 11, iPhone SE (2020), and iPhone XR, even as the new iPhone 12 series had a strong pick-up in Q4CY20.

4G auctions: Jio, Airtel, Vodafone Idea to participate

Source: The Economic Times, Feb 10, 2021

Telecom market leader Reliance Jio, second-ranked Bharti Airtel and financially stressed Vodafone Idea (Vi) have filed applications for participation in the upcoming 4G spectrum auctions, due to start on March 1.

The auction for over 2300 MHz of airwaves — valued at ₹3.92 lakh crore at base price — though is likely to see limited bidding intensity for spectrum worth less than ₹48,000 crore, with Jio and Airtel expected to be the main players.

Industry executives have confirmed to ET that the three telcos have filed in their applications although Airtel, Jio and Vi did not respond to ET’s queries.

From the upcoming spectrum auction, the government is expected to net less than ₹48,000 crore. Around a fourth of this could come into the government coffers this fiscal itself, as upfront payment.

With the three telcos putting their hats in the ring, markets expect some aggression from Jio and Airtel mainly, now that they both have announced their 5G prowess. Although the Department of Telecommunications (DoT) is not auctioning the expensive 5G airwaves in this tranche, bulking up existing 4G spectrum will allow telcos to launch 5G services immediately in those bands.

5G to roll out in India by early 2022; panel pulls up DoT for delay

Source: Business Standard, Feb 08, 2021

The government expects that the roll-out of 5G services will begin in early-2022 after another round of spectrum auction that is planned to be held after six month, according to a panel report tabled in Parliament on Monday.

The Standing Committee on Information Technology pulled up the Department of Telecommunications (DoT) for delay in the launch of 5G services when several countries have commercially rolled out the next-generation technology.

The telecom ministry has already announced the auction of spectrum worth Rs 3.92 trillion from March 1, but it does not include the desired frequency band for 5G services. The committee has been informed that by the end of the calendar year 2021 or beginning of 2022, there will be some roll-out in India in some specific uses, because 4G should continue in India for at least another 5-6 years, the parliamentary panel, headed by Lok Sabha MP Shashi Tharoor, said.

Govt eases 5G path by reducing notice period to 6 months for rolling out new tech by telcos

Source: LiveMint.com, Jan 28, 2021

New Delhi: The government on Thursday eased the path for 5G rollout in the country by reducing to six months the notice period for offering any new technology using the spectrum being put up for auction in March.

Earlier, the Department of Telecom (DoT) has asked telecom operators to give one year notice before starting any technology using spectrum across the seven frequency bands that will be offered in auction on March 1.

“In case of switching over to different technology while rolling out the networks for compliance of roll out obligations, information regarding the new technology should be given at least six months before any new technology base station is offered for testing,” the amendment in the spectrum auction clause released by the DoT said.

The government has announced plan to auction 2,251.25 Megahertz (MHz) of spectrum worth ₹3.92 lakh crore in seven frequency bands — 700 Mhz, 800 Mhz, 900 Mhz, 1800 Mhz, 2100 Mhz, 2300 Mhz and 2500 Mhz. Bharti Airtel has demonstrated 5G services in the 1800 Mhz band. Reliance Jio has claimed it is ready for rollout of the next generation technology provided it gets spectrum for the same.

Chinese brands continue to dominate Indian smartphone market

Source: Financial Express, Jan 28, 2021

The smartphone shipment data for the 2020 calendar year show that Chinese companies control two-thirds, or 75%, of the Indian market despite a growing call for boycotting their products amid the ongoing border tensions between the two countries.

“The anti-China sentiments largely subsided by the end of the year with Chinese brands holding 75% market share in 2020. During the year, we saw innovative channel strategies from leading brands due to changed consumer behaviour in the wake of Covid-19,” Counterpoint Research analyst Shilpi Jain said.

Offline-centric brands such as Samsung, Vivo and Oppo increased their online presence. Samsung increased its online presence with the Galaxy M series on Amazon and the Galaxy F series on Flipkart. Rival Xiaomi launched ‘Mi on Wheels’ to drive its sales on offline channels and in remote areas.

Xiaomi recaptured the top spot from Samsung in Q4 2020 with a strong 13% year-on-year (y-o-y) growth. The South Korean company had displaced its Chinese rival from the top spot in Q3 2020. According to Counterpoint Research data, Samsung was once the undisputed leader till Q3 2017 but was replaced for the first time in Q4 2017 by Xiaomi.

The year 2020 also brought unexpected changes in the Indian smartphone industry due to Covid-19, anti-China sentiments, and developing manufacturing ecosystem. It also marked the re-entry of Indian brands like Micromax.

With its newly launched IN series smartphones, Micromax has reached its highest market share in six quarters. With Indian brands revamping their portfolios, and Reliance Jio coming up with an entry-level 4G smartphone, 2021 will be a significant year for Indian brands and the Counterpoint expects their share to increase.

“At the end of the year, we witnessed the return of Indian brands with Micromax announcing its IN series smartphones. Indian brands are looking to expand their market share by leveraging the PLI scheme,” Jain added.

Overall, smartphone shipments declined 4% y-o-y to reach around 150 million units in 2020. However, the market crossed 100 million units in the second half of 2020 for the first time ever. High consumer demand after the lockdown as well as strong promotions on online channels and new use cases like e-learning and work from home drove the market in the pandemic-hit year.

Another notable feature is of Apple surpassing 1.5 million shipments for the first time in a single quarter in India. Apple captured the sixth spot in Q4 2020 with a huge 171% y-o-y growth in Q4 and 93% y-o-y growth in 2020. The launch of the iPhone 12, aggressive offers on iPhone SE 2020 and iPhone 11 and online expansion drove this growth. India’s mobile handset market declined 9% y-o-y in 2020 due to a decline in feature phone shipments. The feature phone market registered a 20% y-o-y decline last year as consumers in this segment were the worst hit by lockdown.

India smartphone market falls 2% to nearly 145 mn units in 2020: Canalys

Source: Business Standard, Jan 27, 2021

New Delhi: The Indian smartphone market slipped 2 per cent year-on-year to nearly 145 million units in the pandemic-hit 2020, with the decline being arrested by strong recovery in the second half of the year, research firm Canalys said on Wednesday.

A report by research firm Counterpoint earlier in the day had pointed to a 4 per cent dip in smartphone shipment to over 150 million units in 2020.

Canalys – in its report – said smartphone shipment in the December quarter grew 13 per cent to 43.9 million units, driven by strong sell-in in preparation of holiday promotions.

The September quarter had also seen a record high shipment of smartphones.

“Smartphone vendors saw sustainable momentum towards recovery in India. During 2020, Indian consumer demand has shown incredible resilience towards smartphones, which has given vendors, channel partners and supply chain vendors enough confidence to bump up investments in the market,” Canalys Research Director Rushabh Doshi said.

Along with the ongoing execution of the PLI (Production Linked Incentives) scheme, the looming 5G rollout, as well as new players’ entries, Canalys expects a faster recovery for the entire industry in 2021, he added.

In the December quarter, Xiaomi shipped 12 million units (27 per cent market share), followed by Samsung 9.2 million units (21 per cent). Vivo remained in third place in India (7.7 million units), followed by Oppo (5.5 million units) and Realme (5.1 million units).

Chinese vendors collectively shipped 77 per cent smartphones in India during the year.

“Political headwind between China and India is having little to no impact on the momentum vendors like Xiaomi, Oppo and Vivo gathered in 2020. Chinese vendors collectively contributed to about 77 per cent of total shipments in 2020, against 72 per cent in 2019, with the share likely to continue moving north as the nation prepares itself for the onset of 5G,” Canalys Research Analyst Varun Kannan said.

The last power shuffle in India, from Samsung to Xiaomi, occurred when the country made its arduous journey from 3G to 4G, he added. “As the nation stands on the brink of a mass-market movement to 5G, Chinese vendors will be ready to capitalise on the shift. All-in-all, the outlook for 2021 will be better than just the nation recovering from COVID-19,” Kannan said.

BSNL to start telecom services in Delhi and Mumbai from March 1

Source: Business Standard, Jan 18, 2021

New Delhi: Bharat Sanchar Nigam Ltd (BSNL) will start providing landline services in the capital city and Mumbai from March 1.

The state-owned company was earlier supposed to start these services on behalf of Mahanagar Telephone Nigam Ltd (MTNL) from January 1, 2021, but was unable to do so due to some internal issues between the two companies.

“Now, BSNL has agreed to go ahead with these services, There were technology-related issues between the two companies and those were causing delays,” an official said without divulging further details.

In December, the Department of Telecom granted BSNL licence for 20 years effective from February 29, 2020, to provide mobile, fixed-line, satellite and other communication services across India, including Delhi and Mumbai.

BSNL has been authorised to cover “local areas served by Delhi, Ghaziabad, Faridabad, Noida and Gurgaon telephone exchanges” and also “local areas served by Mumbai, Navi Mumbai and Kalyan Telephone exchanges”.

Currently, MTNL provides telecom services in Delhi and Mumbai and BSNL currently serves the rest of the country.

The government approved a long-pending plan of merging the two loss-making telecom companies in October 2019.

On October 24, 2019, the Union Cabinet approved an Rs 68,751-crore revival package for loss-making BSNL and MTNL, including 4G spectrum allocation and voluntary retirement scheme, as well as their merger.

The Cabinet also approved merger of the two telecom companies and indicated that till the merger process is complete MTNL will operate as a subsidiary of BSNL.

The package included raising of Rs 15,000 crore sovereign bonds to meet the immediate capital requirement of both the companies, 4G spectrum allocation worth Rs 20,140 crore, Rs 29,937 crore for Voluntary Retirement Scheme (VRS) covering 50 per cent of their employees, and Rs 3,674 crore for goods and services tax that will be levied on allocation of radiowaves.

According to the official figures, over 92,000 employees of both the companies had availed of the VRS package — over 78,000 employees of BSNL and over 14000 employees of MTNL.

Earlier, BSNL’s workforce stood at 150,000 and that of MTNL at 22,000.

Both BSNL and MTNL have been synchronising their operations since 2012.

MTNL started providing basic telecom service in 1986 in Delhi and Mumbai.The government granted MTNL licence to provide mobile services in October 1997. MTNL has 3.37 million mobile and 3 million landline customers while BSNL mobile subscriber base stood at 118.88 million and landline customer base was 7.74 million at the end of October 2020, according to the Telecom Regulatory Authority of India’s latest subscription data.

Lava launches world’s first customisable smartphone developed in India

Source: The Economic Times, Jan 07, 2021

NEW DELHI: Home-grown mobile device maker Lava International on Thursday unveiled the world’s first customisable smartphone that will allow customers to choose the components — camera, memory, storage capacity and colour — on their own from the company’s website.

The customisable smartphone series, branded as MyZ, has been developed indigenously at Lava’s facility and will be available for purchase from January 11, Lava International, president and business head, Sunil Raina said while announcing the launch.

“The world’s first customisable phone from Lava will enable customers to choose from up to 66 combinations of camera, RAM, ROM and colour. This will give them freedom of choice based on what they think suits their usage. They can customise and upgrade their smartphone at any time based on their need,” Raina said.

The company has been making devices for brands like Nokia, based on their requirement.

“Customers can also come to upgrade their mobile phones at any time of their device life. They can choose any of the components of their choice — front camera, rear camera, RAM (random access memory), ROM (read only memory) and colour on pre-purchase and upgrade from lower configuration to higher configuration. The entire program has been done by talents in India,” Raina said.

He said that the company is looking at acquiring 5 per cent market share this year with a new product portfolio.
As part of the new product portfolio, Lava unveiled the first phone designed by its engineers in India, Z1, which comes with 2GB RAM and Corning Gorilla Glass 3 protection with a military grade certification priced at Rs 5,499 a unit.

The company expanded its portfolio of smartphones in high-end also with military grade certification Z2, Z4 and Z6 built on Mediatek octa-core processor with Corning Gorilla Glass 3 protection, 5,000 mAH battery in the price range of Rs 6,999 to Rs 9,999.

MyZ along with Z2, Z4 and Z6 will be available for purchase from January 11 across online and offline channels.

Lava is one of the 16 companies that qualified for the production linked incentive scheme of the government. The company is eligible for incentives on mobile phones priced under Rs 15,000 a unit under the domestic company category of the scheme.

“I don’t think any other company is providing Corning Gorilla Glass protection in the price segment that we are doing. I haven’t heard of any other mobile phone company giving 6GB RAM and 64 GB ROM combination under Rs 10,000 price segment like we are giving in Z6.

“This year we are looking at getting 5 per cent market share in the smartphone segment and grow from there. We will meet PLI targets for current fiscal,” Raina said.

Lava claims to have manufacturing capacity of 4 crore feature phones and 2.6 crore smartphones per annum.

The company also announced foray into wearable segment with BeFIT smartband for Rs 2,699 a unit that can measure body temperature, oxygen level, heart rate etc.

Lava’s phone upgrade service Zup, smartphone Z1 and BeFIT smartband will be available for purchase from January 26.