India’s smartphone market is seeing a huge shift but Apple might not see
The benefits for at least 2 years
Two in three of the over 1,500 Indian mobile
users surveyed by Counterpoint, said they plan to upgrade within the
next year. This is a shortening of the average 24 to 30-month upgrade
cycle, to just under 20 months, the analyst firm concluded
Most of India's mobile phone users are planning to upgrade to a
new device in the next 12 months driven by consumers wanting 4G
handsets, a trend that is positive for premium electronics giants like
Apple and Samsung in the long-term, according to Counterpoint Research.
Two
in three of the over 1,500 Indian mobile users surveyed by
Counterpoint, said they plan to upgrade within the next year. This is a
shortening of the average 24 to 30-month upgrade cycle, to just under 20
months, the analyst firm concluded.
Indian mobile users' desire
for 4G capable phones with more advanced features is driving the trend.
One in three respondents were considering phones with a fingerprint sensor and a better front-facing selfie camera.
The trend is
positive in the long-term for the likes of Apple and Samsung, which both
offer premium handsets at a high price. But in the near-term neither
will see a boost in India, a country seen as a driver of growth in a
slowing smartphone market.
"All the brands who are successful in
sub-$200 segment like Lenovo, Xiaomi and a handful of Indian brands will
benefit," Neil Shah, research director of devices and ecosystems at
Counterpoint Research, told CNBC by phone.
"In the longer term you
will have a bigger user base who will want to upgrade to a better
phone. Apple will benefit post-2018 with a maturing user base and the 4G
network will be available everywhere. People will be using more
services. In the next two years it would be a good idea for Apple to
roll out their retail footprint and invest in manufacturing."
Apple's
cheapest smartphone model is the iPhone SE which retails in India at
27,000 rupees ($420.50). Currently sub-$200 phones are the most popular
in India. Apple Chief Executive Tim Cook has continuously talked up the
potential of the Indian market and revealed earlier this year that Apple
had "all-time record revenue results" in the country in 2016.
Apple is
keen to expand and do well in India given cooling sales in China.
Cook
has visited the country and met with officials. Apple has set up a
partnership with Taiwanese manufacturer Wistron which is set to soon
start assembling iPhones in India, a move which could bring the cost of
the device down. At the same time, Samsung has struggled in India for
the past few years, but has a number of lower cost devices that could
appeal. But it will also be hoping to find new consumers for its higher
priced Galaxy S8 smartphone which was recently released.
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