India Smart Phone Market Contracts in Q4 2014: IDC

The shipment of smartphones in India fell 4 per cent, the first quarter-on-quarter basis fall ever, largely due to a high channel inventory at the beginning of the quarter.

The feature phone market also plummeted by about 14 per cent over the sequential third quarter, while the overall mobile phone market fell 11 per cent to 64.3 million units in Q4 of calendar year 2014, according to a report by International Data Corporation (IDC) India.

Users began migrating to smartphones from feature phones, the study said adding smartphones formed a healthy 35 per cent of the overall mobile business in Q4 2014, which is up by 13 per cent  from a year ago fourth quarter.

''Smart Phone vendors are quick in gauging the consumer demand for 4G handsets. In percentage terms, 4G handsets are still in single digit. But vendors who are not yet ready with the 4G portfolio are likely to miss the next wave of smartphone growth story," said Karan Thakkar, senior market analyst at IDC India.

''In the current market scenario there is a drive in demand for products pitched with high specification at low price points. This trend is likely to continue over the next 4-6 quarters, post which consumers are expected to turn back to the handset vendors who charge premium for quality," Thakkar added.

Samsung maintained its leadership position during the quarter, despite Apple posting stiff competition, while ''Online exclusive'' brands are hurting the brand in the value for money category.

Micromax witnessed an inventory correction during the quarter, owing to high inventories pumped into the channels during the previous quarter.

 Intex, which did not feature in the top five smartphone vendor list until the third quarter of 2014, rose to third spot. The retail presence of the brand has seen more than a two-fold rise while focused product launches and media advertisements worked well for the brand.

However, Lava has slipped to the fourth position, even though the brand remains consistent and stable with a good amount of visibility of its distributors. For  Xiaomi, it's online only strategy has paid off well. Even with minor hiccups like temporary ban on a certain handset model, the brand made it to top five smartphone vendor list.

The overall mobile phone market shrank by 11 per cent quarter on quarter. The steep fall can be attributed majorly to the feature phone category. While Karbonn did not make it to the top five vendor list in Smart Phone category, it continues to remain strong in the feature phone segment.

A quick look at the overall vendor share shows the strong presence vendors have in the feature phone market to make it in the top five list at an overall level.

IDC said it anticipates a sluggish first quarter in 2015. However few global vendors, which were in the inventory correction phase until now, are likely to exhibit big shipment numbers starting Q1.

''Operators are gearing up for 4G network rollout. For vendors and ecosystem partners, greater emphasis on 4G enabled handsets at competitive price points will be the order of the day. End-users' desire to upgrade and keeping abreast with the latest technology, will continue to drive a strong growth for the smartphone market in CY 2015," said Kiran Kumar, research manager, client devices, IDC India.