Factors driving this premiumisation trend include affordable financing schemes, better value for trade-ins, and bundled schemes
Indian smartphone sales, which have been dominated by the entry and mid-range segments, are set to change as the high-end and super premium ranges grab consumer attention. The premium category is expected to grow more than 20 per cent in 2024 compared to the previous year.
While the overall smartphone market is expected to witness modest single-digit growth in 2024, most of this growth is anticipated to come from premium devices and 5G upgrades.
“While we expect some growth in the Rs 10,000-20,000 and Rs 20,000-30,000 segments, a majority of the growth will come from the premium category. We expect more than 20 per cent growth in this segment in 2024,” said Shilpi Jain, senior research analyst, Counterpoint.
After flat growth in 2023, India’s smartphone shipments picked up in the first quarter (Q1) of 2024 (January-March). In Q1, while the market grew 8 per cent year-on-year (Y-o-Y) in terms of volume, it grew a substantial 18 per cent in terms of value, according to data from Counterpoint – a market research firm.
“During the quarter, India’s smartphone market reached its highest ever Q1 value. The growth was driven by the strengthening trend of premiumisation, with consumers upgrading to higher-value smartphones across price tiers,” said Jain.
New launches during the quarter, such as the Samsung Galaxy S24 and OnePlus 12 series, allowed the premium segment (>Rs 30,000) to reach a record 20 per cent volume share and 51 per cent value share of the overall smartphone market in Q1.
“There is brand push as well. Brands are prioritising profits over higher volumes, and are aiming for higher ASPs,” she said.
Notably, the ultra-premium category (>$800 or roughly >Rs 65,000) recorded the highest growth at 44 per cent, with its share up from 7 per cent in Q1 2023 to 9 per cent a year later, as per data from the International Data Corporation (IDC).
Factors driving this premiumisation trend include affordable financing schemes, better value for trade-ins, and bundled schemes, along with the demand for top-tier features such as AI, gaming, and imaging enhancements.
Upasana Joshi, senior research manager, client devices, IDC India, said that several new launches across multiple price segments happened during the quarter, coupled with increased promotional activities, particularly around premium offerings.
“Brands continued their focus on micro-financing schemes to drive affordability. e-tailers organised several sales events and offered discounts on models nearing their end-of-life (EOL), resulting in increased demand and lean inventory,” Joshi said.
Apple and Samsung cornered most of the market share in the premium category during the quarter and are expected to maintain their lead going forward.
The iPhone 14/15/14 Plus/15 Plus together accounted for as much as 64 per cent of shipments in Q1, followed by the Samsung Galaxy S24/S24 Ultra/S23/S24+ with 25 per cent share. Overall, Apple led the segment with a share of 69 per cent, followed by Samsung at 31 per cent, as per IDC data.
Driven by the increased demand for high-end devices, Apple – with an ASP of $953 – had a record first-quarter shipment, growing by 19 per cent Y-o-Y.
Price discounts, special deals on e-tailer platforms, and attractive financing options led to this consistent growth for Apple beyond the festive season, with the iPhone 14/15 making up 56 per cent of shipments for the Cupertino-based firm, IDC analysts said.
Regardless, device prices across categories are expected to rise this year.
“Vendors are aggressively pricing their products to capitalise on the premiumisation trend fuelled by wider channel access and easy financing options. Price hikes are expected to continue as operational pressures rise due to higher component costs, despite import duty reductions on a few parts. Brands are also prioritising channel incentives and retail investments, driving costs up further,” said Sanyam Chaurasia, senior analyst, Canalys.
First Published: May 22 2024 | 5:30 PM IST
