Future Growth of Handsets in India
The Indian mobile market closed out 2011 by moving 182 million handsets for the year according to ABI Research. This volume of sales pushed the annual growth rate to 14.1%. The long term expectation for India is to hit a volume of 335 million units a year by 2017.
These aren’t as big as the numbers we’re expecting to see out of China, but it is still nothing to sneeze at.
The current leaders in India by market share remain Nokia (37.2%), Samsung (14.9%), G’Five (7.5%), and Micromax (5.8%). Nokia is so far ahead of the competition because this includes feature phones.
As usual, the smartphone segment is expected to be the fastest growing, with hopes of reaching 97.2 million units per year by 2017 (29% of the total market). India’s local brands have been able to fend off most of the outside competition by making themselves cheaper and better localized. That’s beginning to change as the outsiders are learning the lessons of localization.
China manufacturers, Huawei and ZTE, are playing in the market through white label brands, but have not entered the market yet themselves. Official entry by them could rock the boat a bit given what they’ve done in Europe.
3G Infrastructure Stability
Much of the growth in the smartphone industry is expected to be because of the build up of 3G infrastructure within India. My colleague, Gurpreet Singh, just returned from 2 weeks in India where he attended the VAS India 2012. He reported that many of the carriers were touting the 3G infrastructure in India. His problem with this, though, is that it isn’t as stable as they say. When pressed, many of the companies backed away from their position and redirected the blame to government complications.
We’re not in a position here at mobiSights to say who is actually to blame, but we can say that the 3G networks in India are not seamless and connectivity is dodgy at best in some areas – a far cry from what it needs to be in order to really push the technology. By the time 3G becomes stable in India it will already be an ancient technology.
We’re also not saying that this is going to kill growth. It won’t. Our thinking is that any growth that occurs in India is going to be because of a consumer mentality of “it’s something rather than nothing”, not a “we’re buying because what we have is awesome” view point.
But then is it even worth it at this point as 3G is already being surpassed? Why not go the LTE some countries in Latin America are going? Or with another newer tech? Perhaps India’s carriers already feel they are too invested in 3G to change course now. Actually, this is probably nine-tenths of the problem. Infrastructure is expensive, and once you commit, it’s hard to change course.
Whatever the case, 3G technology is the platform that is being pushed – whether it leaves India leaves India looking like a “technology follower” rather than a “technology leader” is something we’ll have to wait and see.