The
booming Indian smartphone market seems to be losing steam as sales
growth tapered down in the April-June quarter despite the launch of
several new models and buyback and EMI schemes.
Leading
retail chains The Mobile Store, UniverCell and Planet M Retail - which
sell mostly smartphones through more than 1,400 outlets across the
country - say sales growth slowed to 8-9% in the latest quarter, more
than 20% less than the preceding January-March period.
They
attribute the slowdown to a number of reasons including the free
falling rupee making imported gadgets more expensive, slowing down of
upgradation in the top-end segment and consumer fatigue caused by too
many similar products in the market.
"The huge
euphoria in the market during the start of the year has sobered down,"
Himanshu Chakrawarti, CEO of the country's largest cellphone retail
chain The Mobile Store, says. "The EMI and buyback war in the
January-March quarter pushed up demand but now consumer fatigue seems to
have set in," he says.
The smartphone market,
however, is still faring better than cheaper phones. According to the
latest databy market tracker GfK-Nielsen, overall handset sales in the
country fell 1.6% year-on-year during April-May. On a sequential basis,
sales growth was 3% in April and 7% in May, compared to more than 12%
growth in the first quarter. GfK-Nielsen's figure for June is yet to be
published.
With brandsSamsung, Sony and HTC
increasing prices by 3-6% last week due to the free fall of rupee,
retailers fear the demand for high-end smartphones may slow down
further.
Retail chains say sales growth has
dampened in the above Rs 25,000 segment despite the launch of a slew of
flagship models in the April-June period, including Samsung Galaxy S4
and Galaxy Mega, BlackBerry Z10 and Q10, and Nokia's Windows Phone
8-powered Lumia series. They say Apple's iPhone too has hit a plateau in
India.
Videocon Group-owned Planet M Retail
CEO Sanjay Karwa says consumers who have brought hi-end models priced
above Rs 25,000 last year or early this year are not upgrading so easily
for the latest flagship launches.
"Consumers
who brought handsetsiPhone 4S, iPhone 5, Samsung Galaxy S3 or Note II
are not changing their handsets at the same pace with which they would
do whenever a new flagship model would get launched. The macro-economic
factors are probably pinching them," he says.
At Planet M, sales growth of high-end handsets priced above Rs 25,000 has almost halved year-on-year in the quarter ended June.
Samsung
Mobile country head Vineet Taneja, however, says the market leader's
sales are not impacted and that its flagship model Galaxy S4 has become
the highest selling smartphone in the Rs 25,000-plus segment and
registered higher sales than any other flagship device in its first
month.
The Mobile Store, which reported around
15% same-store sales growth in January-March, clocked around 8-9% in
the latest quarter.
UniverCell, the country's
second-largest mobile phone retailer with 430 stores, too says its
same-store sales growth has come down in April-June.
D
Sathish Babu, managing director at UniverCell Telecom, says sales of
sub- 4,000 handsets fell 20% in the latest quarter because telecom
operators have suddenly stopped promotional activities such as lower
call rates or free SMSes.
"The options for
upgradation in this price has become limited since now even entry-level
handsets are feature richdual SIM," he adds.
Retailers
say smartphones priced in the Rs 8,000- 20,000 range is the segment
that is growing at a fast pace. There have been a slew of launches in
this segment too, including Micromax Canvas 4, Sony Xperia L and Samsung
Galaxy Fame and Galaxy Core.
Indian brands
such as Micromax, Karbonn and Videocon plan to launch products in this
segment with specification and features that match up to the flagship
models of multinationals.
In fact, Indian
brands Micromax and Karbonn were the second- and third-largest
smartphone brands in the country in terms of shipment during
January-March, according to CyberMedia Research. During this period, 9.4
million smartphones were shipped in India, which was 167.3% more than
the year-earlier period.
Smartphones now account for 26% of the total market by volume and 70% by value.
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