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Global smartphone shipments fell to 1.2 billion in 2022, the lowest level since 2013 and a decline of more than 11% from the previous year, according to IDC. Moreover, the 144 million smartphone market in India fell 10% in 2022. The Indian smartphone market is evolving, however this fall is just one aspect of it. The way people are spending money on smartphones in the Indian smartphone market has undergone major shift.
The sub-$150 market is falling out of love
For the first time, in 2022, the sub-$150 segment's share of global smartphone shipments crossed the 50% threshold for the first time, declining to 46%. The market share of Xiaomi, the chosen supplier in the sub-$150 segment, decreased as a result. According to IDC average selling prices (ASP) of smartphones in India climbed 14% from $196 in 2021 to $224 in 2022. This is the result of various factors.
- In 2022, premium ($500+) and mid-premium ($300–$500) climbed by 55% and 20%, respectively (see Figure 1).
- Feature phones experienced a decline of 18% in 2022, and smartphones priced under $300 experienced a decline of 15% (see Figure 1).
- The replacement cycle for smartphones has extended to 32–36 months from the previous 18–20 months.
Apple’s Ascent
In 2022, Apple sold almost 7 million phones, up from 3 million in 2020 (see Figure 2). In order to increase its regional focus, Apple is expanding its presence in India and making changes to its management structure. In addition to shifting production to India, Apple is working to increase its share of the country's premium smartphone market over the next ten years. After seeing tremendous development in China, Apple understands the value of a large market like China and the necessity of taking the necessary steps to seize the opportunity.
Emergence of 5G Phones
In 2022, 36% of smartphones will be replaced by 5G devices, which will be the main driving force behind this change. In 2023, the proportion of 5G phones is anticipated to reach 50%. The average selling price (ASP) of 5G phones is falling from $431 in 2021 to $395 in 2022, but it is still around 1.7 times the ASP of smartphones in 2022. In 2023, we predict that sales of smartphones will be driven by 5G, both in terms of volume and price.
